SAA intends to keep on flying despite delay in government’s R2 billion bailout
FINANCIALLY beleaguered South African Airways (SAA) said on Thursday that all flights would continue as normal for now, even though the government was still seeking ways to fund R2 billion of a R4bn bailout.
“The airline is aware of reports suggesting that it will cease operations. Where there may be flight schedule amendments, such operational changes will be managed and communicated in accordance with the industry norms and practices,” the airline, which is in business rescue, said.
SAA is one of several state entities struggling with debt after years of mismanagement.
Lenders agreed in December to provide R2bn to enable SAA to continue to operate, while the government committed an equal amount. However, the funds from the government had yet to be paid, as of yesterday.
A Sunday deadline for the funding had been extended after the Department of Public Enterprises (DPE) pledged to continue trying to persuade the National Treasury to come up with the money.
SAA, which last made a profit in 2011 and which has received R57bn in bailouts since 1994, has been struggling to pay its bills after the Treasury baulked at providing it with more funding and the airline was put it into business rescue.
“We are determined to break with the past patterns of bailouts, as these have become a moral hazard,” DPE spokesperson Sam Mkokeli said in a statement on Sunday. “We are determined to contribute to the business-rescue process so that we could minimise job losses,” he added.
The carrier has already burned through a loan it got from banks last month, according to people familiar with the matter.
Lenders are hesitant to step in again, said people, who asked not to be identified because the talks are ongoing.