SAA and SA Express to be closed down as part of coronavirus response 

The National Treasury may have inadvertently revealed that the embattled national carrier South African Airways (SAA) and its sister airline SA Express will be closed down.

In Finance Minister Tito Mboweni’s speaking notes released before his teleconference with journalists yesterday, the national treasury said the government will close SAA and SA Express as part of its economic policy response to the COVID-19 pandemic.

“Supported by an economic recovery plan (structural reforms) and a set of reforms within the fiscal system e.g. passing the RABS (road accident benefit scheme), consolidation of public entities and closure of SAA and SAX [SA Express],” the speaking notes read.

However, in final remarks posted on the National Treasury’s website, Mboweni’s remarks did not make an explicit reference to the closure of the airlines – which are both under business rescue.

“… and consolidation of public entities and reviewing our portfolio of state-owned enterprises,” reads the final version.

SAA has not made a profit in nearly 10 years and has gone through numerous unsuccessful turnaround strategies over years with the airline relying on government bailouts to stay in the skies.

A leaked letter from Public Enterprises Minister Pravin Gordhan addressed to SAA’s business rescue practitioners further added credence to speculation that the demise of SAA was nigh.

Gordhan, in the letter dated 10 April 2020 denied the business rescue practitioners’ request for an additional R10 billion government guarantee.

“…Government is unable to provide additional funding to sustain the business rescue process beyond the funding that has already been provided to the airline in terms of the post commencement finance (pcf),” reads Gordhan’s letter.

“Further to this please note that neither will lending guarantees be provided in respect of the Business Rescue process.”