South Africa considers merging South African Airways and SA Express

South Africa will explore merging two of its state-owned airlines, South African Airways (SAA) and SA Express, and seek a minority equity partner for the company, Finance Minister Pravin Gordhan said on Wednesday.

Many of South Africa’s 300-odd state entities are a drain on the government’s purse and a team commissioned by President Jacob Zuma to review the companies recommended that some companies should be sold.

Treasury said in its 2016 budget review the government was implementing recommendations of the committee and would examine private sector participation in the state-owned companies.

“We do not need to be invested in four airline businesses,” Gordhan said in his budget speech.

“(Public Enterprises Minister) and I have agreed to explore the possible merger of SAA and SA Express, under a strengthened board, with a view to engaging with a potential minority equity partner, and to create a bigger and more operationally efficient airline.”

“Government will seek opportunities to enter into strategic partnerships that allow SAA to draw on private-sector capital and technical expertise to improve its performance and expand its network,” Treasury said.

South Africa’s state-owned firms range from SAA to power utility Eskom and logistics group Transnet, among others.

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