South Africa considers merging national flag carrier and regional SA Express airlines

Published on : Saturday, May 13, 2017

SA Express airlinesThe work to assess the viability of a merger between national flag carrier South African Airways and regional airline South Africa Express (SA Express) has been completed, South African Finance Minister Malusi Gigaba says. A government review is pending.

 

He said this when he made his maiden appearance for an oral question and answer session in the National Assembly in Cape Town on May 10th since his appointment as Finance Minister on March 31.

 

“The work is complete and the next step is for Government to review the options and recommendations to allow an informed decision to be taken on how to proceed, including alignment to the review currently underway on SAA’s long-term turnaround strategy. The review by government will determine whether equity partners, if any, would become part of the ownership structure of the State-owned airline assets,” he said.

 

Former finance minister Pravin Gordhan had announced in his Budget Speech on Feb 26, 2016 that he, together with Public Enterprise Minister Lynne Brown, had agreed to explore the possible merger of the two State-owned carriers under a strengthened board, with a view to engaging a potential minority equity partner and creating a bigger and more efficient airline.

 

Gigaba said the National Treasury and the Department of Public Enterprises jointly adjudicated the bids received in response to the tender which had been issued.

 

Subsequently, the government had appointed a Boston-based management consulting firm, Bain & Company, and South African consulting and advisory firm, Abacus Advisory, to assist it in undertaking a comprehensive assessment of all options before reaching a final decision on the optimal ownership and corporate structure of the airlines.

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