August 1, 2021

South African Airways still bailed out by the government?

A leak indicates that the South African government is finally ready to rissue money in the airline South African Airways, its final restructuring plan – or disappearance – being expected by the end of the week.

If the national company of South Africa has canceled all its flights until the end of June 2020, while hoping to resume by the middle of the month its line between its base in Johannesburg-OR Tambo and the airport of Cape Town, the path to its survival is still unclear. “Leaked” by the opposition who speaks of “madness”, a draft stimulus plan indicates that the state is ready to give $ 264 million in PAC, on a drip for years and subjected to endless political intervention.

The plan indicates in particular that the “new South African Airways” would lose a billion dollars during his first three years – almost as much as the government had paid him for the last three years. The project would also consider a effective halved to around 2,500 employees, and one great limited to “about twenty planes” for the coming years.

Placed under protection against creditors in December, South African Airways was officially “abandoned” in April by the state which refused to give money to a company in addition to grounded by the Covid-19 pandemic.

The administrators of BRP (Business Rescue Practitioners) immediately reacted in a statement Monday, explaining that ” draft plan was sent to the creditors ‘and employees’ committees as well as to the DPE (Department of Public Enterprises) “. As indicated in the text (…), it is “ for discussion and may not be distributed to any other party. Since this is a project and has not received agreement or comments from any of the people involved, we will not comment on the leaked project in the media and will wait for comments from affected parties. , as prescribed by the Companies Act. Assuming and commenting on this project as if it were the final version would be very irresponsible ».

Directors will endeavor to publish the final rescue plan ” as soon as they are able to do so and will inform creditors of the plan development process “. The delay will not prevent them ” to continue taking the necessary measures to advance the commercial rescue of SAA, and to take proactive steps to save money and protect the interests of SAA “. They could publish their findings on June 8, according to some sources.

Last week, the chief financial officer of the Star Alliance Philip Saunders said: “ everyone at SAA looks forward to welcoming and serving our customers again. Our operational readiness is underscored by the important role the airline has played in global repatriations to and from South Africa, and by our willingness to serve the domestic market. “. In the meantime, she is continuing her repatriation flights.

©South African Airways

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