SA hires Bain, Abacus to advise on ailing state-owned airlines
Government has hired Bain & Company to advise it on the strategy and corporate structure of the three lossmaking state-run carriers to improve the benefit to the state from owning the airlines.
Bain, which is based in the US, was awarded the contract as part of a joint venture with Abacus Advisory, according to a post on Treasury’s website. The contract was awarded in October for a threemonth period, a spokesperson for Treasury said.
Government is seeking advice on the corporate structure of SAA and SA Express, which could lead to the sale of a minority stake in the airlines and the disposal of assets that aren’t central to their businesses, according to a separate invitation-to-bid document. The state is also seeking advice on how to improve the financial performance of the airlines, reduce risk and develop a “wellcoordinated strategy”, the document shows.
SAA and SA Express are surviving on state debt guarantees at a time when government is trying to rein in spending and raise revenue amid slowing economic growth. Cabinet approved a new board for SAA on August 31 to overhaul management of the airline, which hasn’t made an annual profit since 2011.
The carrier last month said it presented a corporate plan to government that indicated a return to profit in 2021.
SAA’s low-cost unit, Mango Airlines, which is also included in the scope of the contract, made a net loss of R36.9 million in the year to March, news website Fin24 reported.