South Africa’s Finance Minister Tito Mboweni says the country’s loss-making national carrier should be closed down.
If South Africa wants an airline, he told investors in New York, it should start afresh.
South African Airways has not made a profit since 2011.
It has been kept airborne by massive injections of cash that the state says it can no longer afford to pay.
No bank is prepared to step in and no investor would be prepared to take on SAA’s 1.3-billion euro debt.
The South African Government has fallen into the same trap as many African countries in believing the national carrier is a measure of prestige.
It has bought aircraft it cannot hope to fill and flown routes that could not possibly be profitable.
The new Finance Minister Tito Mboweni is adamant that there can be no holy cows in South African efforts to revitalize its faltering economy.
He accepts the future of SAA is not under his remit, and therefore he cannot make decisions about the airline.
“It’s loss making.It’s very clear to me that you are unlikely to sort out this situation. So my view would be: close it down.We have the case study of Swiss Air, which had to close down and start a new airline. The only thing I would request is: give us the colors. Why I said close it down is because it’s unlikely you are going to find an private sector partner would come and join this asset,” says Mboweni.
He says after closing SAA, the government could involve private equity partners and launch a joint venture airline.