SAA ask­ing for an­other bailout

Sunday World - - World Of Business - ANDILE APRIL

STATE-OWNED air­line South African Air­ways (SAA) does not seem to be a vi­able busi­ness.

This is be­cause the so-called na­tional car­rier has re­quested yet an­other bail-out of R6bn from the gov­ern­ment.

This is not the first time that the air­line has asked for a huge in­jec­tion of funds from tax­pay­ers’ money through the state.

In 2009, un­der the lead­er­ship of for­mer CEO Khaya Ngqula, the air­line got a R1,6bn bail-out from the then fi­nance min­is­ter, Trevor Manuel, in or­der to help SAA meet its costs of re­struc­tur­ing and to en­sure fi­nan­cial sta­bil­ity.

In fact, over the past seven fi­nan­cial years, the gov­ern­ment has res­cued the na­tional car­rier and coun­try’s largest air­line to the tune of R16,8bn.

But the air­line’s cur­rent CEO, Siza Mz­imela, has played down the news, say­ing that the air­line is dis­cussing fi­nanc­ing its bold new growth strat­egy with the gov­ern­ment.

Throw­ing cold water on the mat­ter on Fri­day, Mz­imela told Sun­day World that SAA’S dis­cus­sion with the gov­ern­ment on its growth strat­egy in­cludes in-depth ex­plo­ration of a cap­i­tal in­jec­tion aimed at se­cur­ing the air­line’s abil­ity to thor­oughly mod­ernise its op­er­at­ing fleet.

She said the ex­act fig­ures are still un­der dis­cus­sion.

How­ever, she said the re­cap­i­tal­i­sa­tion strat­egy fund could in­volve the de­ploy­ment of be­tween R4bn and R6bn over five years by the share­holder.

Mz­imela’s ex­cuse for SAA’S re­quest from the gov­ern­ment is that across the globe, air­lines are turn­ing to their share­hold­ers for sup­port as they respond to the mas­sive pres­sures in the in­dus­try by seek­ing greater ef­fi­cien­cies through fleet and sys­tems mod­erni­sa­tion pro­grammes.

“Like other air­lines that are in very good shape and have a key role in their na­tional economies, SAA is seek­ing to keep ahead of the game through these mea­sures aimed at growth and ef­fi­ciency,” she said.

Mz­imela said the strat­egy will in­clude grow­ing the num­ber of its long-haul air­craft by up to 30% in

Picture by Reuters

FURY: Protest­ing min­ers and res­i­dents throw rocks at po­lice near Impala Plat­inum’s Rusten­burg mine.

Picture by Sibusiso Msibi

BEG­GING BOWL: SAA CEO Siza Mz­imela.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.