SAA secures R3.5bn to keep it afloat until June, still needs more
In order to implement its three-year turnaround plan, SAA says it needs a total bailout of R21.7 billion from government.
JOHANNESBURG - South African Airways (SAA) says it has managed to secure R3.5 billion to keep it afloat until June.
The state-owned entity says negotiations are also underway with banks to rollover debt of R9.2 billion to the end of next month.
The cash strapped airline is currently exploring turnaround strategies to address its debt crisis including the possible unbundling of the airline.
In order to implement its three-year turnaround plan, SAA says it needs a total bailout of R21.7 billion from government. The airline already received R5 billion of that sum last year.
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SAA’s debt currently stands at R12.7 billion which is guaranteed by government.
The airline also needs a further R4 billion cash injection in order keep operations going until June.
SAA says its aiming to break even by 2021 with changes afoot to help cut costs and stay afloat. These include breaking up SAA into three parts, each with its own management, but no decision has been taken yet.
SAA spokesperson Tladi Tladi says they’re waiting on an announcement from Finance Minister Tito Mboweni as to when they will receive the rest of the money.
“There is no decision to break the airline into three separate entities. It’s about the internal reconfiguration of resources to bring more accountability and more efficiency in terms of our operations.”