The decision by its business rescue practitioners to liquidate the insolvent SA Express, a division of South African Airways, has been welcomed by the Democratic Alliance, who says the same fate should await South African Airways.
“There is no reasonable prospect for SA Express to be rescued,” the DA said in a statement today, adding that the government had spent R1.5 billion in bailouts to the airline in the past two years. SA Express suspended operations on March 18 until further notice.
It said the Minister of Public Enterprises Pravin Gordhan should apply the same logic to SAA, “which is equally bankrupt and represents a considerable ongoing drain on the fiscus at a time of national crisis where the funds potentially earmarked for shoring up a failed company could be better employed in the battle against Covid-19. We do not need a flying albatross – what is needed is all hands on deck in the ship’s infirmary.
The DA said that SA Express recorded a loss of R591 million in 2019, more than three times the previous year’s R162 million. It added that closure was “the inescapable reality of an entity whose financial position is so dire that March 2020 salaries to its 691 employees have not been paid.”