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SAA cannot afford its own operations according to South Africa’s Minister of Finance, Tito Mboweni.
In his medium-term budget address to Parliament on October 31, Mboweni said: “SAA is unlikely to ever generate enough cash flow to sustain operations in its current configuration.
“Which then begs the question, how long are we going to be on this current flight path.”
The Minister called for a new approach to dealing with the country’s ailing SOEs. According to Mboweni, the main reason behind increasing government debt is simple. “We spend more than we earn. We must wean state companies off the national budget. They must learn to stand on their own feet.”
He went on to say that SAA could fix things with urgent operational and governance intervention.
Mboweni sees government funding in SAA as an unfortunate decision to “subsidise the middle class and wealthy to fly around the country and other parts of the world” while forgetting the masses of South Africans who still travel on other forms of transport.
The Minister concluded by saying he was optimistic that conversations between SAA and potential equity partners would liberate the fiscus.
Source: tourismupdate.co.za