More wobbly hovering

The R6,5bn government guarantee handed to embattled national carrier, SA Airways, has allowed it to hold an AGM and table its financial results. However, the airline is expected to report a loss even greater than that in its previous set of results.

Last year, SAA could not table its results because it failed as a going concern. However, the airline confirmed last week that it had convinced its auditors of its going concern status and would host an AGM this week.

In its financial results for the period ended March 2013, SAA reported a loss of R1,17bn which is 39% higher than the loss it reported in the previous financial year.

The new guarantee, which adds to an existing R7,9bn in guarantees afforded to the airline, is a lifeline.

SAA would have run out of cash this month and may have ended up with a R1,7bn funding gap by September without a government guarantee, according to internal documents.

The government guarantee allows the airline to borrow from commercial banks. It will also provide comfort for lessors of the new 23 widebody aircraft that the airline said it wanted to acquire by December last year.

Andiswa Maqutu maqutua@bdfm.co.za