The Free Market Foundation (FMF) think-tank has accused State-owned regional airline SA Express (SAX) of breaking the law by not responding to a request for information under the Promotion of Access to Information Act (PAIA). The FMF made a PAIA request to SAX on May 31 regarding the troubled airline’s financial situation. The foundation noted that the airline was getting a R1.24-billion bail-out from the taxpayer, but that questions about whether or not SAX was a “going concern” had not yet been answered.
“Section 25(1) of the PAIA says that the information officer of an entity must, as soon as reasonably possible, but, in any event, within 30 days, decide whether to grant or reject the PAIA request, or seek a time extension from the requester,” pointed out FMFlegal policy and research head Martin van Staden. “No answer was received by June 19 and the FMF tried to make direct contact. Despite numerous attempts, SAX failed to answer either their switchboard or customer-care phones. We pity the poor customers who try to contact this publicly funded airline.”
Under the PAIA, the FMF requested access to SAX’s full financial statements for the 2016/17 and 2017/18 financial years (FYs) and the management accounts for the FY ending March 31 this year. It also requested the ‘going concern’ assessments by management on March 31 in each of the years 2017, 2018 and 2019.
The think-tank further requested, still under the PAIA, detailed summaries of all ‘payables’ to related agencies, which included (but was not restricted to) Airports Company South Africa, Air Traffic Navigation Services, South African Airways, the South African Civil Aviation Authority (SACAA) and the South African Weather Service. Additionally, the FMF sought any record, whether assessments, business plans or other records, that were used to inform the comment of SAX CEO Siza Mzimela in January that the airline would be profitable by April without further State support.
“Every entity must have a PAIA manual that contains request procedures and contact details,” highlighted Van Staden. “Requests sent to the SAX PAIA email address produced bounce-backs, meaning it is no longer active. SAX is showing contempt for the law.”
The FMF affirmed that it was “particularly concerned” about allegations from 2012 that the airline’s balance sheet and asset register had been fraudulently overstated. The think-tank was now considering taking additional legal action against SAX to force it to comply with the law and the Constitution.
“This is an application under the Promotion of Access to Information Act for access to records of public and private bodies,” he stressed. “As a rights policy institute, the FMF seeks to exercise and protect the section 32(1)(a) right to access to information.” The foundation affirmed that the PAIA constituted an important step, made in democratic South Africa, aimed at replacing the secrecy of the apartheid era with transparency, and breaking down barriers erected between government and the people in predemocratic times.
The FMF observed that the last audited accounts for the airline dated from FY 2016/17. Further, in November last year, the National Treasury informed Parliament’s Standing Committee on Appropriations that SAX was technically insolvent because its liabilities were greater than its assets – hence, the R1.24-billion bail-out to settle government-guaranteed debt.
The SACAA grounded SAX on safety grounds between May and August 2018. According to the SAX website, the airline has a fleet of 24 airliners. This is composed of ten 74-seat Bombardier Q400 twin-turboprop, ten 50-seat Bombardier CRJ200 and four 70-seat Bombardier CRJ700 jet aircraft.