Following talks of bailing out South African Airways, Minister of Public Enterprises, Lynne Brown, has announced that government is considering a three-way merger to aid the administration and management of the state-owned airline.
Brown told Parliament’s Standing Committee on Public Accounts (SCOPA) that the merger would see SAA, SA Express and low-cost carrier Mango, joining resources.
“Ideally, a 25% shareholder is needed to provide management and assistance”, said Brown.
SA Express executives are appearing before the committee to explain irregular expenditure for 2016.
As government's ailing state-owned airlines battle liquidity problems, Brown says the best solution would be to bring the airlines under one holding company.
“The way the airlines are structured at the moment, the business model doesn’t make sense”, added Brown.
She says merging the airlines would allow SA Express to better plan its routes and to fund its own aircraft.
“The answer to all of it lies in how we rationalise the three companies and how we bring in a 25% shareholder.”
The airline is currently operating on loans secured with a government guarantee of R1.1 billion.