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It defies logic that Treasury would agree to provide a R5bn guarantee for SAA without first assessing a turnaround strategy. As it currently stands, one of the terms of the guarantee is that such a strategy must be provided. But this puts the cart before the horse and further perpetuates unfair advantage for SAA in the airline industry.

I have requested a meeting with Public Enterprises Minister Gigaba in which I will ask for the guarantee to be withdrawn. The sustainability of such a guarantee, even with increased state oversight, still gets things backwards. Comair is reportedly considering taking the government to court over the issue, as government provided a guarantee that last year’s bailout would be the last one.

State bailouts for the national carrier have become a national sport. But far from being entertaining, it is embarrassing. Back in 2007, taxpayers forked out R4bn to save what is clearly a questionable business. Every year since then, despite repeated scandal, Treasury has somehow seen fit to send good money after a failed business model. Meanwhile, consumers have suffered avoidable pain through the closure of competing airlines. 1Time, for instance, has recently had to apply for business rescue, as it has been unable to compete in a low-cost airline space in which the competition (Mango) is directly subsidised through being a fully-owned subsidiary of SAA. This was predictable and is an indictment on government’s stewardship of public money.

The shenanigans of repeated SAA bailouts provide the ultimate example of moral hazard in our economy. Government continues to entertain weak sentimental arguments such as ‘national pride’, at the expense of the public purse and fair competition in the industry. Where’s the pride in signalling to a failed entity that it’s worthy of repeated resuscitation?

The truth is that SAA should be privatised immediately. No previous turnaround strategy has come to fruition and the company continues to ignore efficiency by banking on perpetual state handouts.