ANALYSIS | Should taxpayers fund the losses of two competing state-owned airlines?

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They should have merged SAA and Mango ages as was suggested on numerous occasions, says an insider. (Getty Images)
They should have merged SAA and Mango ages as was suggested on numerous occasions, says an insider. (Getty Images)

The main issue regarding competition between state-owned flag carrier SAA and its low-cost subsidiary, Mango, has always been whether the latter would generate additional traffic or cannibalise and divert that of its parent company. 

This according to aviation economist Joachim Vermooten who described competition for routes between Mango and its parent as "very fierce".

Unlike SAA, Mango and the other subsidiaries, SAA Technical (SAAT) and AirChefs, are not in business rescue. All three are in dire need of funding. SAA's shareholder, the Department of Public Enterprises, has been trying to get R2.7 billion of the R10.5 billion allocated for implementing SAA's rescue plan to go to the subsidiaries.

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