SAA board chairperson Dudu Myeni told parliament SAA owns only nine of the aircraft in its 60-strong fleet and thats the main reason the national carrier is going for the dogs and needs to be bailed out financially by the tax payer – again. The airline is bankrupt to the tune of tens of billions of rands.
She told the Standing Committee on Public Accounts (Scopa) SAA pays around R3,5 billion a year in lease costs. Scopa was interrogating Myeni – a close friend of president jacob Zuma – about irregular, fruitless and wasteful expenditure racked up by the airline during the past financial year.
She is quoted by Eyewitness News as telling the committee that SAA used to own its aeroplanes but the fleet was sold off in 2001 in a lease-back arrangement. Myeni is now blaming “some of the airline’s woes on legacy issues such as the sale of the fleet nearly two decades ago” when the American turnaround strategist Coleman Andrews was in charge.
“The cost of doing business at SAA is very high. There are certain decisions that were taken a while back, those decisions appeared to be good decisions at that particular time.”
Acting CEO Musa Zwane said: “As South Africans, let’s just accept that decisions which were taken at that time were wrong decisions and SAA is having a very weak balance sheet. And SAA is an airline which doesn’t have aeroplanes.”
The board’s audit and risk committee chairperson, Akhtar Moosa, told the committee that SAA has negative equity of R12,2 billion and this is why it needs support from the government.
The government gave SAA an R2,2 billion cash injection in July when Standard Chartered called in its loan. SAA has a further R13.8 billion in debt that is due to mature soon.