Tito Mboweni to investors in New York: SAA should be shut down

Tito Mboweni to investors in New York: SAA should be shut down

- During an investment conference in New York, the finance minister said South African Airways should be closed down

- Tito Mboweni said it's loss-making, adding government is unlikely to turn the situation around

- Meanwhile, the president vowed to turn around struggling state entities, which include the ailing airline

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On Thursday, Tito Mboweni, the country's newest Finance Minister, said the troubled government-run South African Airways (SAA) should close its doors.

Mboweni added although he believes the ailing airline should be shut down, it is not in his jurisdiction to make decisions over its future.

SAA has not generated a profit since 2011. The only reason it has survived since is due to government bailouts. Credit rating agencies have, on numerous occasions, said the airline is draining government's funds.

Mboweni, during an investor conference in New York, said it's loss-making, adding that government is unlikely to sort out the current situation, "so my view would be close it down.”

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Mboweni explained his reasoning, saying it's unlikely that a private sector equity partner will join the asset.

Briefly.co.za gathered that President Cyril Ramaphosa, in August, moved the oversight of the airline to the public enterprises ministry, led by Pravin Gordhan. It was previously with the finance ministry.

Ramaphosa vowed to revive troubled state entities, which include South African Airways.

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Vuyani Jarana, the SAA chief executive officer, said he is mapping out a punishing austerity plan to turn SAA around, adding that layoffs and other cuts were unavoidable, according to a report by Eyewitness News.

The airline was once South Africa's biggest airline, as well as a patriotic symbol of pride. Today, the airline is a thorn in the side of taxpayers, who have paid over R30 billion since 2012 to keep it's wings in the sky.

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Source: Briefly.co.za

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