South African Airways (SAA) has received a government bailout of US$ 640 million dollars. SAA has been under business rescue since December 2019.
The R10,5 availed to rescue the redundant carrier was generated from cutting budgets from other departments, public entities and conditional grants.
Presenting the mid-term budget, South Africa’s minister of Finance Tito Mboweni said “R10.5 billion is allocated to SAA to implement its business rescue plan. This allocation is funded through reductions to the baselines of national departments, public entities and conditional grants. This allocation is in addition to the R16.4 billion allocated over the 2020 MTEF in the February Budget for settling guaranteed debt and interest.”
Various sectors of the South African community have spoken against the bailout of SAA. The Democratic Alliance Shadow Minister of Finance said “This is an indefensible, immoral choice, it amounts to throwing South Africans under the plane to pay for SAA”.
Meanwhile, Public Enterprises Minister Pravin Gordhan has applauded the decision to provide further funding for SAA. In a statement released today, Gordhan expressed shock and disappointment particularly with the DA for the criticism of bailing out SAA.
“The minister is shocked and disappointed with the DA, other parties and some analysts lack of insight, financial literacy and understanding of governance processes”. The statement added that, “the DA ignores the suffering of SAA employees and the threat of losing their jobs”.
#SAA #Bailout #JustAfricanAviation
Copyright 2020 Just African Aviation Pty Ltd, Permission to use quotations from this article is granted subject to appropriate credit being given to www.justafricanaviation.com as the source.