State airline merger to cost government R12 million in fees

According to Lynne Brown (pictured), Public Enterprises Minister, government will need to shell out R12.1 million if it wishes to utilise the services of Boston-based consultancy firm Bain and Company to manage the merger of South Africa’s three state airlines – SAA, SA Express and Mango.

In giving an answer to a parliamentary question posed recently by Alf Lees of the DA, Brown said the scope of the work entails the development of an "optimal corporate structure to re-align the state-owned airlines".

In late November last year, at a portfolio committee meeting of Parliament, Brown confirmed the existence of a merger plan for the airlines, noting that this would take three years.

There has been increasing pressure by business and opposition parties in recent months for the national carrier to be privatised. SAA has, over the past two financial years, made a significant loss of over R7 billion. Mango also recorded a loss; some R36.9 million for the financial year ending February 2016.