Determined to ensure its national carrier, South African Airways, stays afloat in the global aviation industry despite its haemorrhaging financial status, the carrier has again received another R16bn for its operation.
South Africa Airways last secured R3.5 billion in loan funding from the Development Bank of Southern Africa last month.
According to timeslive.co.za, South Africa Finance minister Tito Mboweni has continued to pour taxpayers’ money into loss-making SAA, this time allocating more than R16bn to the bankrupt national carrier.
Mboweni, who was presenting his 2020/2021 budget in parliament on Wednesday, said the government would, in the next three years, allocate R16.4bn to SAA to help it meet its financial obligations, including debt repayments.
“Government has set aside R16.4bn for SAA over the medium term to repay the airline’s guaranteed debt and to cover debt-service costs. The costs of these adjustments are still being finalised, and will be financed from existing provisional allocations for state owned companies,” he said.
SAA has made net losses to the tune of more than R32bn since 2008 and it was recently placed under business rescue.
The national carrier recently stopped flying to several domestic and international destinations in an attempt to reduce operational costs as it battled a cash crunch.
Turning to SA Express, the regional carrier which has accumulated losses of R1.2bn in the past decade, Mboweni said the government would have to decide if it still wanted to continue owning it.
“Government will need to assess its appetite for continued ownership for the carrier, given that it has a limited role in the local aviation market,” he said.
Mboweni told MPs that power utility Eskom would be allocated another R43.6bn of taxpayers’ money to help service its debts.
This is over and above the R49bn cash injection Eskom received in the 2019/2020 financial year.
In the budget review document, Mboweni said Eskom’s financial woes had been compounded by municipalities not paying it for electricity supplied to them.
“This is partly a result of non-payment by municipalities and other consumers. Government is working with municipalities to strengthen governance and financial management,” he said.
The SABC was in line to receive another R1.1bn by the end of March this year to help it meet its financial obligations.
The latest allocation to the SABC is the balance of the R3.2bn rescue package the government committed to last year.
Mboweni has also distributed R576m to struggling state-owned arms maker Denel.
“This support is allocated with conditions that emphasise the need for Denel to speedily implement its turnaround plan. The plan includes exploring private-sector participation, optimising its property and plant, and developing an appropriate funding model.
“It’s critical for government to define Denel’s role in a modern defence industry.”