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The ASRI Report

Neelam Rahim |

4-minute read
16 March 2024 | 13:00 CAT

The South African Airways (SAA) has seen better days; in an attempt to make a comeback with several national and international roots, the unforgettable images of the maiden flight over the stadium all those years back at the first event South Africa won of General Consideration, Minister Gordan announced the collapse of the SAA Takatso negotiations.

Mr Pravin Gordhan is the current Minister of the Department of Public Enterprises in South Africa. He will retire from active politics at the end of the current Ramaphosa administration this year.

The government insists the airline will not be bailed out again like other State-Owned Enterprises (SOEs).

Underscoring the deal with Radio Islam International in this week’s ASRI Report, Director of Research at the Auwal Socioeconomic Research Institute (ASRI), Angelo Fick, explains, “Minister Gordan has indicated that one of the problems with the deal was under evaluation in the wake of the economic collapse of the Covid pandemic and there was a 4.5-billion-rand difference between the evaluation of the original deal three years ago and what the airline is possibly valued at now.”

Fick pointed out that the department and stakeholders could not agree on structuring a deal under the new evaluation.

However, Fick highlighted that this came after Minister Gordan refused to release all sorts of documents into the public domain through the parliamentary process.

“He wanted things to be done in secret and without media presence. He has had quite a few combative moments of defence posturing around this deal which has now fallen apart, the assurance that there will not be bailouts, many critics are asking will the bailout be disguised as something else,” Fick says.

Involving the PIC seems to be a disguise for what would have been a direct bailout. It now looks like an investment from the Public of Investment Cooperation, which is just more tax and government employee pension money into this thing called the National Carrier, Fick said.

While SAA is South Africa’s oldest airline, various things must be considered, like the importance of competition in the airline space within South Africa, which should be dominated by solo players as that affects consumers’ abilities.

Fick poses concerns about whether the government should own an airline.

“The State can play the role of regulator of the market without necessarily owning an airline, and a lot of this has to do with pride. The jets flying over the inauguration of Nelson Mandela in 1994 and every Presidential inauguration since, are things we can happily get nostalgic about but say goodbye to if the integrity and financial regularity of the state is one of the questions,” says Fick.

Meanwhile, Fick highlighted issues of a more political nature, including the DA writing to the US Secretary of State, Anthony Blinken, requesting assistance in the 2024 general elections, the party candidate lists that were recently leaked to the media, and the IEC’s quick response to discipline the official implicated in the breach. He also highlighted the woes of the water outages affecting millions in the City of Johannesburg.

Listen to the full ASRI Report on Sabahul Muslim with Moulana Junaid Kharsany and Angelo Fick.


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