Cape Town – Public Enterprises Minister Pravin Gordhan has expressed optimism about the future of South African Airways (SAA) despite its past challenges.
Gordhan officially relaunched SAA and its direct flights to São Paulo, Brazil, highlighting the need for proper management of the airline’s current expansion and the conclusion of a deal with an equity partner.
“Notwithstanding State capture, notwithstanding the Covid pandemic, SAA is where it is today. What we can see ahead of ourselves, as part of the recovery of SAA, is a tremendously bright future, if we manage the current expansion properly but also conclude the deal with the equity partner, which should be concluded either late this year or early next year.
“That will add a lot more money… to SAA to expand and will multiply its capacity to fly South Africans out of South Africa and also bring tourists into South Africa from all parts of the world as it once did, but now in a financially sustainable way,” the minister said.
He noted that SAA’s survival now depends on its own strength and support from its equity partner, and the airline’s balance sheet has been restructured through the business rescue process.
He sees this as a signal to investors that reforms are possible in South African state-owned entities.
ALSO READ | SAA relaunches with direct flights to São Paulo, Brazil
“What we have been able to do is to firstly establish that there’s no more money that’s going to come from taxes that’s going to go into SAA, like the R40 billion that went in over a 10-year period. SAA must survive on its own strength… [and] on the capital that is actually provided by the strategic equity partner and it must grow organically. Through the business rescue process, its balance sheet is not encumbered in any kind of way.
“It took three and a half years of very hard work…to ensure that we steer this process. It’s a signal to investors and the investing community in South Africa that reforms are possible in South Africa. That we can execute, just with South African talent, these very complex deals and complex reform processes in State owned entities,” he said.
Gordhan also suggested that São Paulo is just the beginning, and SAA aims to expand its international network for the benefit of South Africans.
“This flight to São Paulo… is an important event because it signifies an important gesture to all those who critically watch what we’re doing with SAA at the moment. There are many naysayers around and many people in the industry – and sometimes outside the industry – who wish it wouldn’t work. But…we are South African and South Africans are known…for resilience, and a sense of vision. We have our pitfalls every now and again.
“But SAA…is going to be a success. This is a sign that the intercontinental flights – not only through code shares, but SAA in its own right – should be around the corner. São Paulo is just the start. We need to see how we can expand the network because…the beneficiary will be South Africans at the end of the day,” he said.
Follow African Insider on Facebook, Twitter and Instagram
Picture: Twitter/@flySAA_US
For more African news, visit Africaninsider.com
Compiled by Betha Madhomu
