Finance Minister, Tito Mboweni, insists the R10.5-billion allocation to South African Airways (SAA) is not a bailout.
Mboweni, who was answering questions in the National Assembly, said a discussion is needed on restructuring state-owned entities. He says those draining the fiscus must be shutdown.
“The issue about SAA is a very difficult one, both politically and financially. We’ve sought to approach the matter in a balanced way,” he said.
Meanwhile, SAA will have to cut its overhead costs and trim its staff to 1,000 employees.
According to business rescue practitioners, this is critical to the airline’s long-term survival.
It will cost over R2-billion to pay severance packages. Despite the allocation to implement the rescue plan, the airline’s caretakers warn that their exit should not be hasty.
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Source: eNCA
