Deputy President Paul Mashatile is open to revisiting the sale of South Africa’s national airline.
South African Airways (SAA) was on the brink of having 51% of the entity sold to Takatso Consortium in March, a plan abandoned at the last minute.
The airline has received multiple bailouts from the state in the last 10 years, with Mashatile openly questioning the need for a state-run airline.
SAA privatisation
SAA is one of many state-owned enterprises (SOE) that has received bailouts in recent years.
A National Treasury briefing to the Standing Committee on Public Accounts (Scopa) stated that R329 billion was spent on recapitalizing SOEs like Eskom, Transnet, the South African Post Office, SABC, Denel, Airports Company South Africa, and more, between 2013 and 2023.
Speaking to the Sunday Times, Mashatile said: “I think the government reached the stage at some point where it asked itself a question: do we want to own an airline, what’s the point?”
The deputy president added that where it made sense, the government should open the doors to private investors who can revitalise the SOEs.
“The right approach would have been to bring the private sector in even much earlier. Many people in the private sector want to invest in an asset like that,” Mashatile said.
R6.5 billion SAA valuation
As well as conflicts of interest, a key reason in the breakdown of the partial sale of SAA to Takatso was a steep increase in the government’s valuation.
Minister of Public Enterprises Pravin Gordhan said in March that his department valued the business at R1 billion and SAA’s properties at R5.5 billion, reported Ch-Aviation.
This was a considerable jump from the R2.4 billion valuation from three years earlier when SAA was under business rescue.
However, Gordhan stated that SAA would not be eligible for a bailout in the future.
“There is no reliance on government itself. It must run its operations ad efficiently as it can and as profitably as it can, and sustain itself as we go forward,” said Gordhan.
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