Brown: Govt considering merging SAA, SA Express & Mango

Minister Lynne Brown says merging the airlines would allow SA Express to better plan its routes and to fund its own aircraft.

FILE: Public Enterprises Minister Lynne Brown. Picture: Thomas Holder/EWN.

CAPE TOWN - Public Enterprises Minister Lynne Brown says government is considering a merger of its three airlines – the South African Airways (SAA), SA Express and low-cost carrier Mango.

She's told Parliament's standing committee on public accounts that ideally, a 25% shareholder is needed to provide management and financial assistance.

SA Express executives are appearing before the committee to explain irregular expenditure for 2016.

As government's ailing state-owned airlines battle liquidity problems, Brown says the best solution would be to bring the airlines under one holding company.

“The way the airlines are structured at the moment, the business model doesn’t make sense.”

She says merging the airlines would allow SA Express to better plan its routes and to fund its own aircraft.

“The answer to all of it lies in how we rationalise the three companies and how we bring in a 25% shareholder.”

The airline is currently operating on loans secured with a government guarantee of R1.1 billion.