Pressure is mounting on government to announce where the more than R15 billion funding will come from to rescue South African Airways (SAA).
The newly restructured airline faces liquidation if government fails to meet the funding requirements that the SAA Business Rescue Plan has set out.
Last week, SAA Business Rescue Practitioners announced that if the funding was not available by Thursday, they would call another creditors’ meeting to either liquidate or find another solution for the airline.
Aviation expert Linden Birns says it’s crunch time for government to put up the money.
“In the budget in February, Finance Minister Tito Mboweni committed R16.4 billion to repay the banks that had loaned SAA money. So far it has paid R9.3 billion of that, the rescue plan that everyone agreed to requires government to raise R10 billion over the next three years.”
“R5 billion of this is needed immediately to pay for working capital as well as to pay the severance package of all of the staff that have been retrenched and there is no indication or provision in the rescue plan for additional for an additional year of losses for the airline,” adds Birns.
In July, the Department of Public Enterprises welcomed the vote and applauded all stakeholders for realising that a new, restructured, competitive airline is the best option to preserve the brand.
Earlier, Philip Saunders, Chief Commercial Officer at SAA, was also appointed as the Acting Chief Executive of the new airline.
The video below talks about a new national carrier that’s to come from the SAA business rescue plan:
Source: SABC News (sabcnews.com)