Brown dispenses tough love to struggling SAA

South African Airways is technically insolvent, but Public Enterprises Minister Lynne Brown is determined to save it.

Brown said yesterday SAA lived off guarantees to finance its loans, but it had to become sustainable, even if it had to cut routes.

She also disclosed that SAA had yet again asked the national Treasury for a guarantee to borrow more money, but Finance Minister Nhlanhla Nene had refused it.

"Technically, SAA is not a going concern. No annual financial statements were submitted after the SAA annual general meeting on September 26."

This week, Brown accepted the resignation of six SAA board members. She appointed two new board members in place of the six, saying she aimed to make the board leaner.

John Tambi, an aviation expert , and Anthony Dixon, a chartered accountant, are the new directors.

To retain institutional memory and experience, the Cabinet kept on two board members, Duduzile Myeni as chairman, and Yakhe Kwinana.

When asked whether Myeni was not one of the reasons that the SAA leadership was dysfunctional, Brown conceded that the board had been factional but added that its upheavals were part of the problem because every time there was a change institutional memory was lost.

"This board must stabilise SAA. I don't care who likes whom. The important thing is that the airline must learn to live off its balance sheet, not off government guarantees," Brown said.