What is the point of keeping SAA around? When was the last time they weren't hemorrhaging money?
It has been mentioned a couple of times in this thread that the last year SAA made a profit was 2011 so coming up to 9 years.
There's lots of talk that just closing it down will cost the government a lot more (mentions of R 80 billion)...which will have much bigger ramifications for the country as a whole.
Besides the government bailouts, SAA has a lot of loans from banks, etc, that are secured by the government. SAA being an SOE, its debts are linked to debt of other SOEs, notably the power utility Eskom, the other grossly mismanaged and horrifically overindebted SOE. I don't know the precise details, but the long and short of it is that, if the government allows one SOE to default on its debt, the lenders can call in the debt of other SOEs. I imagine this is to protect the lenders and keep government in line.
Should SAA default, the figure that goverment could be on the hook for is way more than R80b - over R400b from what I've head. The government simply does not have the money, it would have severe consequences for the country.
Whatever we may think about the government's reasons for wanting to have
an airline, they have no choice but to keep
the airline running until it can be brought back into the black.
Very harsh measures that SAA (government) needed to take and quite admirable they had the balls to do this as they mishandled the airline for a long time without taking any action.
Just to be clear, the government had nothing to do with this decision. They would never ever ever do something like this. This was the decision of the business rescue practitioner. The goverment's hands are tied, and everyone from the unions to the president is very upset about this. The next thing we will see (already announced) is deep staff cuts, another remedy the governement would never do themselves.
Remember that the governing party, the ANC, is an alliance that includes A TRADE UNION and the communist party. They're the people who agreed to a an 8% pay rise across the board at the very moment that SAA didn't even have cash for the next month's salaries. Lay-offs? Not on their watch.