Plans to Merge SAA, Mango and SA Express Amidst More Corruption Revelations

South African Airways (SAA), SA Express and Mango are to be merged, Public Enterprises Minister Pravin Gordhan said on Thursday.

The minister also revealed that an intervention team, which he put in place at SA Express last week, has already uncovered two dodgy deals.

One is a R67-million per month fuel contract which was entered into without following due process. The other is a payment of R5.7-million to Gupta-linked Trillian Capital for advisory services and to raise capital. Again no due process was followed AND “it appears no capital was ever raised”, said Gordhan.

He said the focus at SA Express had become ‘how can I steal’ rather than ‘how can I make this airline run properly’.

Briefing media at the Imbizo centre in Parliament on board appointments of State-owned companies (SOCs) in the Department of Public Enterprises (DPE) portfolio, Gordhan said there are plans to now merge SA Express, Mango and SAA.

He said currently, the three airlines fly to the same destinations.

“Bringing the airlines together and rationalising their routes is important. Rationalising the kind of aircraft needed at a particular time and day – that’s the experience we’re beginning to learn from airlines around the world.

“It’s that synergy and savings. Our net guess is that by putting the airlines together, we can go through a transition period where there are going to be difficulties.

“If you have something dysfunctional and [you] try to sell it, you will get little for it. The real challenge is putting the right people in the right places both on boards and management teams, and having the right oversight,“ he said.

The Minister announced the appointment of a new SA Express board, chaired by Mmakeaya Magoro Tryphosa Ramano. Other new members on the nine-member board include Ronald Ozzy Lamola and Ahmed Ismail Bassa, the latter of whom is also a member of the SAA board, which will enable government to better realize the synergies between the state airlines.

Gordhan said the new board has a mix of aviation experience, audit and accountancy backgrounds, among others.

In December 2014, government announced the move of SAA from DPE to National Treasury.

Speaking of putting an intervention team in place at SA Express, Gordhan said he made the decision because the airline has been in “dire straits for some time”.

He said: “The job of the team for the last week or so has been to get into deep, technical matters and tell us the truth as to what is really going on.”

In addition, the Civil Aviation Authority (CAA) has been undertaking an investigation at SA Express, the findings of which will be released in due course.

Sources: Twitter, SABC, SAnews.gov.za

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