Airline needs R17bn from government

SAA IS IN financial trouble – the national carrier requires more than R17 billion from the government in the next few months.

Public Enterprises Minister Pravin Gordhan confirmed to MPs yesterday that he would meet with Finance Minister Tito Mboweni to raise R9.2bn for SAA to pay the banks by March.

The national carrier needs R3.5bn by next month, and another R4bn by the end of March.

Gordhan said he has to deal with the issue of funding for SAA.

“On the liquidity issue, SAA has its own issue of R21.7bn (it requires for funding). They have to work with the minister of finance and myself to gain access to liquidity, and they have to improve revenue,” said Gordhan.

“SAA, Denel and other SOEs are in a squeeze right now. The banks are not as friendly as they used to be. They require a plan, management and skill to see the plan is working,” he said.

“On the R9.2bn for next March, that is part of the discussion with the minister of finance. We will come back to you on that one,” said Gordhan.

SAA chief executive Vuyani Jarana said they had a plan to get capital to fund the airline. He said they had asked for loans of R21.7bn from the banks some time ago.

This was after MPs raised concerns over how the airline was able to raise so much money when it had no capital, and was relying on bailouts to stay in business. But Jarana said the banks had been asking for a plan to profitability and debt reduction.

“We believe SAA is fixable. It needs the board and its management,” said Jarana.