Flash Briefing: Omicron travel ban leaves SA tourism reeling, citizens stranded; Prasa mess threatens foreign investment; SAA, Takatso deal progresses

  • The near-global travel ban to and from South Africa over fears of the Omicron variant has left the local hospitality industry reeling. Not only has this latest travel ban done untold damage to many local businesses that would have benefited from tourism over the festive season, but its sudden onset has also left South Africans abroad stranded. The Department of International Relations and Cooperation is working on getting stranded citizens home, but it is proving a challenge as flights have been suspended. South Africans have been left stranded in many European countries and even Mauritius. Many others are stuck at home after making plans to visit family abroad.
  • International investors in the rail sector in South Africa have threatened to disinvest from the country because of “the mess” at the Passenger Rail Agency of South Africa (Prasa). The government has warned that international players are ready to close up shop in South Africa as Prasa has failed to get its affairs in order, including contracts and tenders, and cut back its wasteful and irregular spending. The companies looking to leave are involved in overhaul contracts, but Prasa has failed to issue any, meaning there is little reason for these companies to stick around. South Africa stands to lose billions of rands in investment.
  • South African Airways’ chosen strategic equity partner, the Takatso Consortium has confirmed that the due diligence process to buy a 51% stake in the state-owned flag carrier is now complete and no material issues were identified. SAA, which was in business rescue from December 2019 to April 2021, started domestic commercial flights again on 23 September. The state-owned airline stopped commercial flights in May last year when the rescue practitioners indicated that there were insufficient funds to continue with commercial operations. According to Takatso, it is not yet involved in the running of SAA. The consortium says negotiations with SAA’s shareholder, the Department of Public Enterprises (DPE) are continuing. Minister of Public Enterprises Pravin Gordhan told Bloomberg that government expects to conclude the Takatso deal early next year.
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