South African Airways (SAA) has spent its R5 billion government bailout in just one month but says it needs much more money to stay airborne.
Not too long ago, during his mid-term Budget Speech, Finance Minister Tito Mboweni begrudgingly admitted that government would, once again, replenish SAA’s beleaguered bank account with R5 billion.
SAA’s R5 billion blowout
Mboweni later said that the national carrier should be shut down as it’s a financial burden on the state. A month later, Adrian Lackay, the spokesperson for the Ministry of Public Enterprises, said that government was both unwilling and unable to continue bailing the embattled company out of its self-imposed financial despair.
Yet, the horror of Mboweni’s allowance announcement on 24 October has been overshadowed by the state ownedenterprises’ spectacular spending spree.
By 10 November, SAA’s CEO, Vuyani Jarana, admitted that the company had already spent R3 billion of the bailout to cover urgent debts. Almost three weeks later, while addressing members of parliament, both Jarana and the airline’s CFO, Deon Fredericks, confirmed that the remaining R2 billion had been spent on further “practical capital requirements”.
While the R5 billion bailout was intended to pull SAA out of the doldrums of economic collapse, company executives have, once again, approached government, cap-in-hand, crying imminent financial ruin.