South Africa’s Finance Minister says national air carrier needs to shut down

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South Africa’s Finance Minister Tito Mboweni says struggling national air carrier South African Airways (SAA) should be closed down.

The new Finance Minister however added that decisions over the future of the state-run carrier were outside his remit.

SAA, which has not generated profit since 2011, survives on state guarantees and is regularly cited by credit ratings agencies as a drain on the government purse.

“It’s loss-making, we are unlikely to sort out the situation, so my view would be close it down,” Mboweni told an investor conference in New York televised live on South African public broadcaster SABC.

“Why I say close it down is because it’s unlikely that you are going to find any private sector equity partner who will come join this asset,” Mboweni added.

In August, President Cyril Ramaphosa transferred oversight of SAA to the public enterprises ministry which is led by Pravin Gordhan from the finance ministry. Ramaphosa has pledged to revive struggling state firms, including SAA.

SAA CEO Vuyani Jarana has said he is mapping out a punishing austerity plan to turn the flag carrier around. He has indicated that layoffs and other cuts were inevitable.

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