SA Express to explain wasteful expenditure to Parly
SA Express says that like SAA, it will need a cash injection to keep their planes in the sky.
CAPE TOWN – Government’s ailing regional airline SA Express will have to explain to Parliament this week why it’s incurred more than R30 million in fruitless and wasteful expenditure.
The airline’s latest audited financial statements reveal that while it made a R16 million profit in 2015/16, it also incurred an irregular expenditure of the same amount.
Chairperson of Parliament’s Standing Committee on Public Accounts (Scopa) Themba Godi says Members of Parliament (MPs) will be considering the financial position of the airline against the backdrop of talks of a merger with South African Airways (SAA).
SA Express says its short to long term debt is hampering its profitability and its weak balance sheet means it also can’t raise any more cash.
Scopa chairperson Themba Godi said: “Their audit is not proving to be an improvement but a worsening situation.”
But it’s the airline’s irregular, fruitless and wasteful expenditure that Scopa really wants to probe.
The airline says it won’t be able to recover the more than R30 million in fruitless and wasteful expenditure because it was incurred on interest and penalties as a result of its poor cash flow.
“If you have an entity that’s basically ailing you can’t then have fruitless and wasteful expenditure of whatever quantity.
The airline says that like SAA, it will need a cash injection to keep their planes in the sky.