Myeni blames some of SAA’s woes on legacy issues
The Standing Committee on Public Accounts is interrogating the irregular, fruitless & wasteful expenditure racked up by the airline during the past financial year.
CAPE TOWN - South African Airways (SAA) owns just nine of the aircraft in its 60-strong fleet and pays around R3,5 billion a year in lease costs, Parliament’s watchdog over the public purse has been told.
The Standing Committee on Public Accounts (Scopa) is interrogating the irregular, fruitless and wasteful expenditure racked up by the airline during the past financial year.
SAA board chairperson Dudu Myeni told the committee the airline used to own its aeroplanes but the fleet was sold off in 2001 in a lease-back arrangement.
Myeni is blaming some of the airline’s woes on legacy issues such as the sale of the fleet nearly two decades ago when the American turnaround strategist Coleman Andrews was in charge.
“The cost of doing business at SAA is very high. There are certain decisions that were taken a while back, those decisions appeared to be good decisions at that particular time.”
Acting CEO Musa Zwane said: “As South Africans, let’s just accept that decisions which were taken at that time were wrong decisions and SAA is having a very weak balance sheet. And SAA is an airline which doesn’t have aeroplanes.”
The board’s audit and risk committee chairperson, Akhtar Moosa, told the committee that SAA has negative equity of R12,2 billion and this is why it needs support from the government.
The government gave SAA an R2,2 billion cash injection in July when Standard Chartered called in its loan.
SAA has a further R13.8 billion in debt that is due to mature soon.
(Edited by Zamangwane Shange)