SAA gets R2.7bn windfall for subsidiaries including Mango and SAA Technical

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SAA was the first SOE to go into business rescue.
SAA was the first SOE to go into business rescue.
Gallo Images/Jacques Stander
  • The Appropriation and Supplementary Appropriation Bills outlines R2.7 billion in funds for South African Airways' concluding business rescue.
  • The reprioritisation gives R1.6 billion to SAA Technical, R819 million to Mango Airlines and R218 million to Air Chefs.
  • The Department of Public Enterprises requested a mechanism to transfer a portion of the business rescue funding to SAA's subsidiaries.


The Standing Committee on Appropriations has received a submission from Parliamentary Budget Office on the 2021 Appropriation and Supplementary Appropriation Bills which outline the reprioritisation of R2.7 billion in funds for South African Airways' concluding business rescue.

The reprioritisation paints a picture of the imperiled state of the national carrier as well as the divisions at a Cabinet level on whether more South African fiscal resources should be plough into the ailing airline.

Finance Minister Tito Mboweni has long been critical of the use of the fiscus to subsidise state-owned entities which should be generating revenue and putting it into the fiscus, while other ANC heavyweights maintain that the national carrier is worth saving and keeping.

SAA exited the business rescue process at the end of April, bringing a close to the undertaking which began in December of 2019. However, the airline and its subsidiaries are far from out of the woods, as SAA Technical is in the middle of planning job cuts and Mango Airlines also faces financial challenges that threatened to ground its flights recently.

The document said an amount of R2.826 billion would be appropriated to fund the extension of the special Covid-19 social relief of distress grant as well as the adjustment to appropriation of money to vote of the Department of Public Enterprises.

"An amount of R2.7 billion is reprioritised from the appropriation to SAA to implement the business rescue plan comprising of R1.6 billion for SAA Technical, R819 million for Mango Airlines and R218 million for Air Chefs," the document said.

The document also said the 2021 Appropriation Bill seeks to appropriate R31.7 billion to settle Eskom's government guaranteed debt and R4.3 billion to settle SAA's government guaranteed debt.

National Treasury deputy director general of public finance Mampho Modise said, after the tabling of the 2020 Second Adjustments Appropriation Bill, that the department of public enterprises requested a mechanism to transfer a portion of the business rescue funding to SAA's subsidiaries.

"The minister of finance may, on request of the minister of public enterprises, approve any portion of an amount referred to in the schedule for a subsidiary of South African Airways for use by another subsidiary of SAA, referred to in the schedule, to address urgent funding needs," said Modise.

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