SAA under fire for cutting route to Buenos Aires

Dino D'Amore
By Dino D'Amore November 7, 2013 13:00

SAA under fire for cutting route to Buenos Aires

Former South African ambassador to Argentina Tony Leon has publically derided South African Airways (SAA) for closely the loss-making Buenos Aires-Johannesburg since it has damaged relations between the two countries. Leon said the closure of the route questions SAA’s role as a state-owned airline since it is not serving the country’s strategic needs. SAA lost R50m a year on the route since it suffers from double taxation as Argentina refused to budge on the issue of tax and the route was also served with older aircraft. Conversely SAA’s Sao Paolo route is still operating since a double taxation agreement had been arranged with Brazil.

Even though SAA loses money on its Beijing route, it was forced to keep it open by the government for strategic and developmental reasons. Mayihlome Tshwete, a spokesperson for the Department of Public Enterprises, has defended SAA against critics since they want the airline to play a developmental role but did not want to see the airline being supported financially in return.

“While we are sympathetic with the Argentinian people we really can’t compromise the financial viability of the company (by retaining the route). That being said, there will be discussions with all stakeholders in the coming months,” Tshwete said.

Dino D'Amore
By Dino D'Amore November 7, 2013 13:00
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