Debtors keep SAA’s wings clipped
CASH-STRAPPED South African Airways (SAA) is owed more than R1 billion but has so far been unable to get it released by the countries that owe it.
The cash has been sitting in several countries in Africa, but SAA and the government have been struggling to arrange to get the money released.
Former finance minister Malusi Gigaba said last year the government was working on getting the money released. The countries that owe SAA more than R1bn include Angola, Zimbabwe, Nigeria and Senegal.
Gigaba said at the time the South African government would engage the governments of those countries because SAA needed the money badly. These countries have owed the R1bn for ticket fees for some time.
SAA currently needs a cash injection of R21.7bn to operate its business.
The National Treasury and the airline said attempts were being made to repatriate the money to South Africa. The Treasury said some of the money had been paid, but there was still some funds outstanding.
However, it denied that the countries were refusing to cough up.
“No single country has refused to release funds. There is movement in terms of the repayments which the countries have to make, and talks among ministers and political heads are continuing to ensure that there is progress.
“There is between $20 million and $25m (between R253m and R315m) that has been paid so far. This year alone the commitment to pay has been demonstrated through funds that have been received. We are in constant liaison with the respective governments and the matter is receiving attention,” the Treasury said.
SAA also said the matter was being addressed by the government. Spokesperson Tlali Tlali said the airline would like the matter to be dealt speedily in view of the national carrier’s own financial situation.
“What is desirable is to have the situation resolved as expeditiously as possible, noting SAA’s own finances. We appreciate the efforts of the shareholder in attending to the situation in cases where we have to escalate. We are just as conscious that the relationship we have with these countries (some of which are our closest neighbours), is not solely defined by the current currency challenges they may face. We remain optimistic that there will be a resolution on this,” said Tlali.
The cash crunch at SAA began several years ago when it suffered six consecutive losses resulting in a number of interventions by the government. In the past six years the carrier has posted financial losses of more than R20bn and the government provided bailouts of the same amount over that period.
SAA has asked the government for R5.5bn to cover immediate costs.