The ongoing strike against the restructuring of the state-owned South African Airways is a proxy battle to curb the government’s strength of will in its ongoing attempts to set the country’s economy back on course. The trade unions embarking on the industrial action against SAA have set their eyes on a much bigger prize beyond the airline: to reverse the reforms Cyril Ramaphosa’s government has embarked on.
It has been a drain on the coffers of national treasury since its founding in 1934. In the beginning, as part of the department of transport, its mission was strategic: to fly South African government officials between Johannesburg and the imperial capital of London. Instead, the audited annual reports of SAA and national treasury documents show that more than R57 billion has been wasted bailing out a perennially loss-making entity, thus giving its management and workforce no incentive to run as a successful commercial entity. That is R57,000,000,000, including the latest R5.5 billion bailout passed by parliament after the 2019 medium term budget statement.This sorry state of affairs is not limited to the democratic era.
After the cumulative cash bailouts of R57 billion mentioned above, SAA still has an outstanding debt of R9.2 billion. “Government will repay this debt over the next three years to honour its contractual obligation. Operational changes at SAA are required urgently,” said treasury in the October medium-term budget policy statement.
In the past 25 years of taxpayers’ money going only one way: to fund the corruption of the ANC cadres deployed to SAA, the taxpayer has not seen any return on the investment. Because income tax to the government and dividends to the shareholder can only be paid from profits, SAA has paid neither in the past 25 years. In another quarter-century from now, SAA will still not be able to sustain itself.