Tensions came to a head today regarding the South African Airways rescue package after parliament members criticized the rescue committee. Members of the South African Parliament accused the rescue board of missing deadlines and having a bad attitude when dealing with parliament. The rescue practitioners were supposed to provide the government with an update on the rescue process today, but this has been delayed.
The ongoing saga involving South African Airways (SAA) is far from over. Government loans and bailout money have supported the airline since it went into administration in 2019. Since then, the government has poured money into the airline but has been criticized for trying to save the airline instead of letting it die.
Today, some of the anger felt in parliament spilled over when parliament members criticized the rescue practitioners. According to News24.com, Mkhuleko Hlengwa, Chairperson for the Standing Committee on Public Accounts (SCOPA) said,
“I am fed up […] The cooperation of the rescue practitioners with us, generally, has not been on a level which is satisfactory. They have to change their attitude about how they interact with Parliament. It is going to make our working relationship very difficult.”
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Miscommunication and missed deadlines
The incident that caused this outburst was SAA and its rescue committee failing to update how the rescue process was going. According to the rescue practitioners, they were only aware they needed to provide an update from an email on March 10th. Although they tried to get together a report in a few days, they failed to do so due to some kind of bereavement.
Hlengwa and the rest of the SCOPA committee say they fully understand the bereavement causing a delay. However, they insisted that an email was sent on March 3rd, giving them more than a week to prepare. It appears to be a classic case of miscommunication. But Hlengwa went on to point out that the practitioners also missed a briefing deadline earlier this year.
Several other members of SCOPA, the committee responsible for protecting the taxpayer money currently being funneled into the airline, have agreed with Hlengwa. SCOPA member Alf Lees said,
“Parliament paid out monies to SAA that are desperately needed for other purposes, and yet we have no real comfort about the future of SAA. […] This is not a petty cash matter. These are major monies of the state being spent on an entity many of us believe it should not be spent on.”
Criticism of government intervention
These voices are echoing statement we have heard before. SAA has a huge amount of debt and commercially doesn’t seem to be a strong bet. Many have said the government should let the airline fall apart to allow for a brand new commercial airline to take its place. But the government seems reluctant to do so.
Many are seeing the situation with SAA as a fight between politics and the free commercial market. South Africa's situation may well be a warning to other governments and national airlines that only so much government support can be tolerated.
Ryanair certainly seems to think too much government support is bad for the overall market. The airline has taken out legal action against several governments providing targeted loans to some airlines during the pandemic.
The question remains; how much further will the South African Government go to save SAA? Let us know your thoughts in the comments.