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Africa Business Opinion South Africa

SAA Should Have Capacity To BE Profitable.

Johannesburg: it is commonly expected in every developed countries, but in the case of South Africa is another story whereby state own enterprises continue to get the bail out from the Treasury Department.

In February when President Cyril Ramaphosa made his first cabinet reshuffle, he appointed Pravin Ghordan as minister of Public Enterprises replacing an incompetent and compromised Lynn Brown.

Many people welcomed the appointment of Ghordan given his experience in Treasury where he used to have disagreements; particularly with South African Airways (SAA), under the then chairperson alleged captured Dudu Miyeni.

It is alleged that Dudu Miyeni had a close relationship with former president Jacob Zuma, and she played a huge role in the corruption and maladministration that happen during tenure at the airways.

The air way has been failing to provide their financial statements, and have been requesting bail out from department of treasury due to poor planning by management.

It is alleged that the troubled airlines lease the planes from foreign countries that are expensive, this raised lots of questions about the procurement standards procedures being followed.

It is also alleged the troubled airline are using some routes that are commercial viable which also creates more problems.

The newly appointed board and CEO Vuyani Jarana have at one stage sent packing in parliament, this happened after they failed to present a tangible turnaround strategy.

South African Airways was once on the forefront and profitable around 2001, whereby it manages to sustain itself without government bailout.

There are also other successful airlines that have proven their worth, such as Quanta’s of Australia and Emirate from Dubai that have become major role players in the airlines businesses.

Some people were proposing privatization of the entity, while some argue it will irresponsible of government to take such drastic decision.

It remains to be seen whether the newly appointed board and the management would manage to turn around thing at the troubled airline, some argue that it needs an overhaul and need to get rid of leasing of carriages.

 

Collins Ndlovu
I'm a passionate Political and Economic Analyst who is passionate about writing, enjoys constructive debates that provide solutions to existing problems.
http://www.article83.co.za

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