'SAA must change business model'

Minister Malusi Gigaba said there was not a limitless amount of money available for SAA.

EWN Generic

CAPE TOWN - Public Enterprises Minister Malusi Gigaba on Wednesday said there was not a limitless amount of money available for South African Airways (SAA) when bosses need to boost their coffers.

He was speaking during his budget speech in Parliament, Cape Town.

SAA management has already put in a R6 billion funding request to boost its balance sheet.

Gigaba joked that SAA will always be able to rely on it main shareholder - the state.

"The support will be there," he said.

The minister said the national carrier has a dual challenge.

SAA is operating in a depressed global economy and is contending with rising fuel costs.

He said the airline must change its business model.

Gigaba said SAA needs a sustainable model to prevent the airline from coming back in two years to ask for a bailout.

He stressed the airline remains a key player in government's African Aviation Strategy.

Since the 2004/05 financial year, government has spent around R16.8 billion on the airline.

Meanwhile, SAA has gone to court in an attempt to recover the R30.8 million former CEO Khaya Ngqula, who allegedly misspent the money while he was with the airline.

The national carrier parted ways with Ngqula in 2009 after KPMG found him guilty of mismanagement.

He walked away with a golden handshake of R8.9 million.