SAA soldiers on without financial backing
SAA will continue to fly on Monday despite an atmosphere of great uncertainty as it remains without the capital to fund operations.
While the business rescue practitioners of the airline had set Sunday as the deadline to curtail operations if funding had not been raised, this deadline has been extended due to promises by the department of public enterprises that it remains intent on persuading the National Treasury to come up with the money.
The business rescue process is dependent on post-commencement funds (PCF) being provided to keep operations going while the airline is restructured and made sustainable. But although government promised that it would provide R2bn from the Treasury and also guarantee another R2bn which was to be provided by a consortium of banks, the government has not been able to keep its side of the bargain. As Treasury has made no statements on the matter, the reason is unknown.
In a statement on Sunday the department of public enterprises said that “after a meeting with the practitioners at the weekend, the department is engaging with the National Treasury to raise funds for the airline in line with the PCF undertaking.”
“The government continues to work with the business rescue practitioners, with the primary goal of bringing out of this process a restructured, modern airline that is able to bring million more tourists and be a beacon of both business innovation and efficiency.
“We would like the airline to create more jobs in tourism and related sectors of the economy and work with other African airlines to underpin and service the integration of African markets and improve dramatically intra-African trade and travel,” the statement said.
However, intense meetings last week between the two departments and with lenders did not result in any financial relief.
A much earlier proposal by former SAA CEO Vuyani Jarana to create “an African airline” in partnership with Ethiopean Airlines was not seriously explored by the government at the time.