South African Transport and Allied Workers Union (SATAWU) calls on the Minister of Finance to stop making irresponsible statements.

Speaking at an investment conference in New York yesterday, Tito Mboweni said state-owned airline South African Airways (SAA) should be closed down because it was loss-making and in his opinion could not be turned around. He also pointed out the decision to shut it down did not rest with him. Which raises the question – why mention it?

Minister Mboweni has the unenviable task of turning around South Africa’s depressed economy with an unprecedented 27.5% unemployment rate and a measly 0.7% growth forecast. This is a grievous task that requires him to act urgently and creatively. But ever since his appointment less than a month ago, Mboweni has seen it fit to make irresponsible statements including one about e-tolls that saw our mother body, Congress of South African Trade Unions (COSATU) in Gauteng and his own political party, the African National Congress (ANC) march to the Union Buildings.

Mboweni rightly pointed out to the New York investors that SAA does not fall under his remit. If it did, then the honourable minister would have known that closing down the national airline would leave 8 000 people jobless. Add to that the at least five people who depend on each of the 8 000 salaries, then we’ll have ourselves an unmitigated disaster.

One imagines the minister went to New York to persuade investors to put their money in SA. Doesn’t it defect the purpose if he tells the same investors that it is not likely any equity partner will want to put money in SAA?

Admittedly, SAA has been loss-making for years. However, while Minister Mboweni and his ilk have been making comments, SAA Group CEO Vuyani Jarana and his team have been implementing a turn-around plan. The plan includes among other factors, realigning the procurement process to ensure transactions beyond a set limit are centrally authorised, thereby cutting costs. The pricing model has also been overhauled to ensure tickets are not sold at a perpetual discounted rate. In the past SAA would pay for services beforehand but now it only pays after delivery thus enhancing its cash flow.

In addition, a lot of thinking has gone into the routes the airline services to make sure fuel is not expended on empty seats. For instance, SAA used to have two London flights per day - now there’s just one. To attract and retain customers, the latest generation Airbus with the latest in-flight entertainment is used on this route.

Turning SAA around is a mammoth task and will not happen overnight. In the meantime, all we ask is for the Minister of Finance to restrain himself.      

 

Issued by SATAWU