SAA asking for another bailout
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
FURY: Protesting miners and residents throw rocks at police near Impala Platinum’s Rustenburg mine.
BEGGING BOWL: SAA CEO Siza Mzimela.