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FMF executive director Leon Louw said that government’s support for the failing state owned airline as well as other struggling state entities was at the expense of essential services like education, health and policing.
Louw said that government policy towards SAA was set out in the Domestic Airline Transport Policy 1990, which was amended in 1991.
Reaffirmed in the 1996 White Paper then confirmed again in the 2006 Airlift Strategy, it sets out policy that SAA must operate autonomously and on a commercial basis, will not enjoy any privileges as a result of it being a government enterprise and government will in future not guarantee new loans to SAA or any other airline with government interests while private airlines have to borrow at their own risk.
“Government bailouts for SAA are duplicitous. In effect they invited private companies to invest, risk capital, create jobs and help to develop the economy, then destroyed them deliberately by providing the means for SAA to use predatory pricing and excess capacity to drive out competitive private companies.
“Enabling SAA to remain in the air is an extension of apartheid policy and in bad faith.” Louw, the two-time Nobel Peace Prize nominee, said.
During the media briefing in Pretoria, Louw said he did not believe that SAA or any state-owned enterprises was capable of running on a sound and genuine commercial basis.
He said that the motivation and incentive of SOE management was completely different from that of a profit-driven private company.
Instead of competitive market forces at play, SOE managers had to deal with political influences and agendas which were irreconcilable with private enterprise.
Besides financial problems, SAA made a series of sudden changes to management; several executives have left the airline. Recently, Vuyisile Kona, the acting CEO, was suspended.
While he did not advocate privatising SAA specifically, the official suggested government adopted the stance of other governments around the world with financial stakes in airlines, back off and leave the operational function to professional managers rather than political appointees.
FMF is an independent public benefit organisation founded in 1975 to promote and foster an open society, the rule of law, personal liberty, and economic and Press freedom. – CAJ News.
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