Govt moves on state-owned airlines merger

GOVERNMENT has taken the
first steps to implement plans
to merge state-owned airlines.
In February, during his
budget speech, Minister Pravin
Gordhan said that government
would look into a possible
merger of SAA and SA Express,
under a strengthened board
(see TNW March 9, 2016).
Public Enterprises Minister,
Lynne Brown, said in a briefing
to the Portfolio Committee on
Public Enterprises earlier this
month that she was in favour of
a merger between SAA and SA
Express, with a possibility of a
25% private equity partner.
The Portfolio Committee
briefing is seen as the first
step towards implementing
the recommendations of the
Presidential Review Committee
on state-owned enterprises.
Spokesperson for the minister,
Colin Cruywagen, told TNW
the Department of Public
Enterprises was considering
whether to merge SAA and SA
Express or create a holding
company that kept three
airlines – SAA, SAX and Mango.
Although SA Airlink is privately
owned, ceo and md, Rodger
Foster, told TNW it made
“infinite sense” for Airlink to
be included in any corporate
restructuring plans involving
SAA and the other state-owned
enterprise airline businesses,
as Airlink’s network airline
system brought enormous
value to SAA with regard to
interlining, and vice versa.
Rodger said Airlink was a
privately owned business with
3% of its stock held by SAA.
“It is a network airline and its
network is a component of
a larger composite network
system together with SAA.
It operates as a franchisee
of SAA, such that seat
inventory within the franchise
environment and, by extension,
throughout SAA’s global
alliances, is available for
multi-sector, multi-carrier
itinerary for single contract
seamless travel available for
sale in the GDS.”