South Africa’s state airlines have drained R145.3 billion since 2000, with SAA alone accounting for over 90% of costs.
Since 2000, South Africa’s state owned airlines have cost taxpayers about R145.3 billion, based on various figures published in the media and by academics, as well as business rescue plans.
South African Airways tops the chart and accounts for R133.3 billion, which works out to roughly R5.1 billion a year over the past 26 years.
Decades of airline bailouts
By comparison, SA Express cost taxpayers R7 billion and Mango R5 billion. Simply put, SAA sucked up more than 90% of the total cost to the fiscus.
Before business rescue, SAA received around R68 billion in bailouts. That excludes the guarantees the government put in place to allow the airline to borrow.
When SAA entered business rescue, another R29.4 billion was injected through secured lenders, post commencement funding and direct state subsidies.
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Under the business rescue plan, the general creditor compromise added R7.4 billion to SAA’s bill while the aircraft lessor compromise came to R28.3 billion for SAA alone. That is money that was never recovered.
In real terms, if state airlines did not gobble up the cash and at R14 a loaf of bread, more than 10.3 billion loaves could have fed a hungry nation.
At R2 500 per Sassa grant, it could have funded 58.1 million grants. That is enough to pay 4.8 million people for a year, or one million people for nearly five years. If the average cost of an RDP house was around R150 000, it could have built about 968 000 homes.
Unemployment could’ve been eased
South Africa’s massive unemployment burden could have been eased with R145 billion able to employ more than 400 000 people at a high wage of R 30 000 a month or 100 000 people for more than four years.
In aviation terms, at around R2 500 for a one way ticket between Johannesburg and Cape Town, the total equals 58 million flights.
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