JUST IN | Government gives up majority stake in SAA

JUST IN | Government gives up majority stake in SAA

A South African Airways aircraft on the apron of Frankfurt Airport in 2018, when it still could fly.

A South African Airways aircraft on the apron of Frankfurt Airport in 2018, when it still could fly.

Silas Stein/picture alliance via Getty Images

In what is being seen as a historic moment by the department of public enterprises, Minister Pravin Gordhan announced on Friday that Cabinet has agreed that SAA will be owned through a partnership between government and a strategic equity partner. 

A consortium will own 51% of the company and government 49%. The majority black-owned consortium of Global Aviation and Harith will be known as Takatso – which means “aspire” in Setswana – and will put in an initial R3 billion. The airline will be domiciled in SA. 

“Government and the ANC has indicated over some time the intention to restructure SAA. The airline was placed into business rescue in December 2019 and since then our objective has been to ensure a viable and competitive airline and once launched, not reliant on the fiscus,” said Gordhan during a briefing.

There is a huge and growing need for intra-Africa air transport, the minister said. The objective of the partnership is a viable, scalable national airline in its own right. SAA will start to build partnerships within the continent.

Gidon Novick, the CEO of the consortium, said shortly after the announcement that it is a privilege to be involved in a project of such magnitude and importance to the country. Novick is a former co-CEO of Comair and recently launched Global’s airline LIFT in South Africa.

Global Aviation has been doing business in SA for almost two decades, and also does charter flights.

“It could be the best time ever to launch a sustainable and iconic new airline,” said Novick.

“Harith, as owners of Lanseria International Airport, has significant experience in the transport infrastructure and aviation sectors. We have deployed more than a billion dollars into a portfolio of critical infrastructure assets across the African continent that support regional economies,” Harith co-founder and Consortium Chair Tshepo Mahloele said in a statement.

The consortium said it wants to list the airline in the future “as one way of addressing future funding requirements and to enable all South Africans to take part in its success”.

Gordhan said on the board of the new SAA seats will be in terms of ownership and vary depending on the outcome of the due diligence process. As far as management of the airline is concerned, government will have a so-called non-dilutable “golden share” of 33%.

The “mess” made at SAA’s subsidiaries – Mango, SAA Technical and AirChefs – during state capture will also be add

“Let the business be run on an efficient basis with all shareholders being served well,” said Gordhan.  

Regarding pilots, Gordha said the consorium will prioritise training and promoting black pilots and women as part of a non-racial team.

“Once the due diligence excercise is completed, we will keep the public further informed about the exact launch dates and more,” said Gordhan.

Mahloele said he believes this is a very novel venture “bringing the best of SA together”.

“We believe the whole sector, from our point of view, is growing. We look forward to the venture and believe it will be very good,” he said.

Novick said it is a very emotional moment for him.

“It is not often that one gets the opportunity to serve one’s country. Many people said we are crazy to start an airline in this environment. We believe it is the best time. Airline models around the world are being challenged and are flawed in many ways. We have the capital and financial insights of Harith,” said Novick during the briefing.

“We have a lot to do. It keeps us up at night. We have to figure out the routes, what planes to fly and understand the subsidiaries of SAA and focus on customers, especially those who were so loyal to SAA in the past. We want to win them back and want them to know this is going to be their airline.”

Asked about the future of SAA’s subsidiaries, Gordhan said “anything could happen to them, let us go through the period of evaluation. We will be careful about how we look after staff and they might even have a stake in the new airline”.

Regarding future government funding for the airline, Gordhan said a line has to be drawn in the sand.

“As far as new airline is concerned, government will not be putting in more money. The name SAA will be retained but anyone with interesting designs and ideas, please submit them,” Gordhan concluded the briefing.

The article has been corrected to make clear that government will keep a 49% stake, not 41%, and that Takatso is a Setswana word (and not an isiXhosa term)

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