Page 6 - World Airnews September 2020 Edition

FLAREPATH

LOW COST AIRLINE FLIES

UNDER THE RADAR

Every passenger is subsidised by the poor

ber 2018 and, more recently, government Such shameless temerity is an attack on

guaranteed funding of about R300 million. private, tax paying, employment generating
very passenger on every SA Express During the period, SAX carried fewer than airlines. It runs contrary to government

E(SAX) fl ight is obscenely subsidised 400,000 passengers. This amounts to R3,850 rhetoric about supporting private enter-

prise, creating jobs and generating revenue.

with money diverted from poverty relief per passenger one-way and R7,700 return. Mzimela also made the implausible prom-

and taxpayers by approximately R3,850 FMF Executive director Leon Louw said, ise that, in April 2019, SAX would make a

(R7,700 return). “Every person who flies SAX must look down profit. South Africans patiently await proof.

as they fly over conspicuously poor settle-

Assuming 50 passengers per flight on SAX failed to issue 2017, 2018 and 2019 fi-

average, this is the equivalent to two RDP ments and reconcile their conscience with the nancial statements, apparently because of its
implications of their ticket. Every time you are

houses for every one-way SAX flight and at an airport and see a SAX plane take off, think inability to obtain an unqualified audit. This

four houses for a return flight. about the subsidy that you are paying to enable may date back to 2010, when SAX recorded a

The state-owned airline has been generating rich people to fly while tax-payers are fleeced spurious profit by some dubious revaluation

losses funded by the poor since 2011 and, in and the poor are denied services, housing and and re-classification of its asset register. This

contravention of the Public Finance Manage- welfare. It is immoral and obnoxious.” was exacerbated by a pay-out of about R11.5
ment Act (PFMA), has failed to produce Audit- According to a 2018 Report of the Stand- million in executive bonuses, of which R3.2

ed Financial Statements (AFS) since 2016. ing Committee on Appropriations on the million went to Siza Mzimela herself, bringing

It gets worse: poverty generating SAX Adjustment Appropriations Bill, SAX said it her total 2010 remuneration to R5.2 million

may be using illegal predatory pricing to would make a loss in 2018/9 of R669 million (R8.5 million inflation adjusted).

undermine private airlines. Minister Pravin however industry insiders believe this is This could be verified in the 2010 AFS,

Gordhan and the Department of Public closer to R1 billion. but they were dubiously deleted from the
Enterprises (DOE) should end this public In a December 2018 interview with the SAX website. Fortunately, the FMF had the

disgrace by terminating financial support Citizen, SAX CEO, Siza Mzimela, admitted foresight to download a copy.

for failed nationalised airlines at the ex- that SAX would compete directly with Apparently SAX instigated a forensic au-

pense of the poor. private competitors by offering prices 35% dit to investigate the accounting irregular-

The audacity of South African Airways to 55% lower than its rivals on targeted ities and possible fraud allegations told to

(SAA) bailouts has monopolised media and routes. Such predatory pricing is possible the Zondo Commission into state capture.

political attention. Meanwhile, SAX flies un- only by fleecing taxpayers and the poor. The investigation must go back to 2010 if it

der the radar avoiding public outcry and its is to have any validity.
bankruptcy while gobbling tax revenues and In the public interest, the FMF submitted

relying on bankers seduced into ignoring a PAIA (Promotion of Access to Information

commercial reality. SAA grabs the headlines Act) request on 31 May 2019, demanding
by the sheer size of the money wasted on relevant information, financial statements for

the poor, who do not fly, subsidizing the 2017 and 2018, and management accounts to

rich, who do fly. But, proportionately, SAX is March 2019. The FMF will also be submitting

much worse than SAA. a SAA PAIA request. Since SAX ignored its
Between August 2018 and July 2019, SAX legal obligation to respond, the FMF is taking

received at least R1.54 billion in bailouts: legal action on behalf of all South Africans. Q

R1.24 billion from government in Novem- Article submitted by Free Market Foundation

World Airnews | September 2019 World Airnews | September 2019
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