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The Undoing Tax Abuse Organization (Outa) has called on South African businesses and consumers to boycott South African Airways (SAA).
This followed the announcement by Finance Minister Tito Mboweni that the government will allocate R10.5 billion to SAA to help it implement its business rescue plan.
Mboweni made this statement during his speech on the medium-term budget on Wednesday, October 28, which drew strong criticism from many commentators.
Signal from CEO Magda Wierzycka said the government is using money that can be better spent elsewhere to try to save something completely unrecoverable.
DA shadow Finance Minister Geordin Hill-Lewis said the ANC government has chosen to cut essential services for the public, such as education and policing, to fund another SAA bailout.
He added that Mboweni should have stood the line and rejected this bailout and that the decision shows the ANC’s contempt for poor South Africans.
Outa has now called for a boycott of the SAA to send a strong message to the government that further wasteful taxation will not be tolerated.
Outa CEO Wayne Duvenage said that since 2007, SAA has cost the taxpayer more than R72 billion in ransoms: R54 billion in treasury grants and R19 million in government guarantees.
“This money could have been used instead to stimulate the economy by creating real and sustainable jobs,” he said.
Outa expressed concern regarding the need for the state to spend more funds on SAA, saying that the latest injection of R10.5 billion will not be the last.
“The current climate and economic environment in the aviation industry is the ideal time for the state to shut down this once successful airline that went bankrupt due to mismanagement and corruption,” Duvenage said.
Outa said keeping unjustifiable state enterprises afloat is a waste of scarce state resources and that SAA is now nothing more than a vain project.
Not the first call to boycott SAA
This is not the first time that a call has been made to boycott the distressed airline and not fly SAA.
At the beginning of this year, Paul Theron, CEO of Vestact, said SAA is a massive drain on the economy, and the sensible and patriotic thing to do is boycott the airline.
He explained that the beleaguered airline was reliant on funding to operate, which is becoming increasingly difficult.
“They’re going to keep borrowing money on less and less favorable terms every week until the whole circus collapses,” Theron said.
“SAA flights are empty. No one in their right mind would book a flight far in advance if there is a risk of the airline going under. “
Theron said an airline is a challenging business, made even worse when it is state-owned and run by fans.
He said the SAA is using state subsidies to compete unfairly and has been fined billions for anti-competitive behavior in the past.
This view is shared by many other commenters, including former FNB CEO and businessman Michael Jordaan.
Commenting on SAA’s losses and mounting bailouts, Jordaan said that carrying wealthy people with losses should not be a national priority.
Outa CEO Wayne Duvenage interview
Comments from Vestact CEO Paul Theron
Read Now: ANC Government Sacrificed Education and Safety to Save SAA – Sygnia CEO
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