'SAA bailout an error in judgement, a slap in the face of students'

Opposition parties have questioned government's decision to grant SAA a loan guarantee.

South African Airways plane. Picture: Facebook.

JOHANNESBURG - Opposition parties have questioned government's decision to grant South African Airways (SAA) a loan guarantee, calling it an error in judgement and a slap in the face of students.

This week Finance Minister Pravin Gordhan informed the airline's new board of Treasury's decision to grant a R5 billion bailou t.

Treasury has set a number of strict conditions to loan guarantee which it hopes will restore SAA's financial viability.

The Democratic Alliance's Alf Lees says while the party welcomes the stringent conditions, it doesn't believe SAA can change its financial situation under the guidance Dudu Myeni, who has been reappointed as chair.

"We're really concerned about the ability of the board to do its job and fulfill the conditions that minister Gordhan has placed on the guarantee with her at the helm, given her history of management."

Congress of the People's Dennis Bloem says government has misplaced its priorities by approving an SAA bailout, while failing to address calls for a zero percent fee increase.

"This is a slap in the face of the student of this country. This government, under the leadership of Zuma, doesn't have its priorities right."

Meanwhile, Treasury has again suggested that SAA work towards the introduction of an equity partner.

Before granting SAA a loan guarantee Gordhan outlined the importance of following procurement frameworks and complying with Treasury's call for continuous information.

The board is also required to finalise the annual financial statements for the 2014/2015 and 2015/2016 financial years which it failed to produce.

The decision to grant the bailout has been met with some resistance, particularly because of the reappointment of Myeni.

But Myeni has given the assurance that SAA is in good hands and will improve its situation.