This archive report was first published on 20 July 2020.
South African Airways has been struggling financially, with the last recorded profit dating back to 2011. The airline was placed in administration in December 2019, and has since received over $1.2 billion in bailouts in the last three years.
As part of a bailout plan, creditors approved a proposal to scale down the fleet, cut thousands of jobs, and inject $599.6 million (10 billion rands) in capital from the government. This could see the workforce trimmed by almost 80 percent.
Public Enterprises Minister Pravin Gordhan revealed plans to run the airline like the state-owned telecoms firm Telkom, where the South African government holds 37 percent of the issued shares with state-owned fund manager Public Investment Corp. owning around 15%.
Gordhan emphasized that the government is keen to learn from the Telkom management model and is still in the process of securing the $599.6 million required for the bailout plan.
South African Airways has been surviving on government bailouts, with the finance and public ministries committed to financing the 10 billion rands for the current bailout. This is on top of $945 million set aside in February this year to repay SAA’s guaranteed debt and to cover debt-servicing costs.
