SAA needs state cash next week -administrators

‘The existing funds which are available for operational expenditure …are near depletion.’
Image: Tod Burns

South African Airways needs short-term funding from the government by the end of next week for the state carrier’s business rescue process to continue, its administrators said on Thursday.

“It is prudent to advise affected persons of the company’s dire financial position,” they said in a statement.

“The existing funds which are available for operational expenditure …are near depletion.”

The administrators took control of SAA in December after almost a decade of financial losses and published their restructuring plan for the airline in June following repeated delays and wrangling over its future.

They plan to scale back the fleet and cut jobs but at least R10 billion ($598 million) in new funds is needed.

The government has yet to clarify where it will find the money but said in a statement on Thursday that a decision on the sources of funding would be announced “soon”.

“A number of engagements have been undertaken with the potential partners, and the interest is encouraging that a suitable long-term investor will be found to enable the relaunch of the airline and its subsidiary businesses and divisions,” the Department of Public Enterprises said.

The administrators said the government had so far advanced R9.3 billion to pay various lenders, but that the remaining portion of short-term funding had yet to materialise.

They said if they are not satisfied that sufficient progress has been made on advancing the funding, a meeting of creditors will be convened on September 18 “to engage with affected persons on this issue”.

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The SAA will be a well-respected, high-flying, hugely successful, super efficient, widely-envied, profitable and popular airways company very soon. Because Pravin Gordhan said so. Why are they all so fussed about funds?

Cannot even run a bath successfully an they want to run an airline? AGAIN????

Just sell the corpse to Air Mauritius or Ethiopian Airlines successful well run companies-and keep Jamnandas far away from anything to do with airlines, Eskom, anything commercial…. Anything that you expect to work!

I think Govt. needs to accept that keeping SAA requires many Billions every three months, if they cannot afford it then sell it.
(Tax payer Billions)

Similar when one owns an old luxury motor vehicle, the maintenance gets more expensive, it breaks down more frequently and you eventually sell it.

I have a lot of sympathy for SAA. I also need a lot of cash by next week.

When one realise the state is still willing to assist SAA going forward….is VERY ‘COMFORTING’.

….comforting in a sense that the (so-called broke) state is able to afford such LUXURY of continuously bailing out SAA & other SOEs.

Such desire to KEEP ON WASTING taxpayer revenue, is indicative that govt must have MORE THAN ENOUGH tax revenue at their disposal (even at current depressed Covid-19 levels). Good news thus…

….it implies that govt’s budget shortfall is not as bad as they make it to be with money they want to splurge on SA & thus increasing tax collections in future becomes NOT necessary.

End of comments.

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