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7 Africa telegraph 25 October - 09 November 2020

The future of South African Airways is South Africa News

still hanging in the balance

By Ilhan Omar
Bloemfontein, South Africa - The pre-
carious situation affecting the South Af-
rican airline still lingers on, after state
bailouts and debt guarantees from the
government for several years.
The loss-making South African Airways
(SAA) appears doomed unless the cash-
strapped government can find more
money to save the carrier.

Last year, the embattled state airline
went into administration and was res-
cued by the government. That was not
the first time. SAA has survived on state
bailouts and debt guarantees from the
government for several years. Its hopes
of a return to profitability through admin-
istration took a serious blow when coro-
navirus brought the global travel and
tourism industry to a stand-still.

At a time when some of the world’s most
profitable and best-run carriers find
themselves in a precarious situation, the
fate of SAA which grounded all its aircraft Financial storm looms on the horizon for the troubled South African Airline
in March seems to be hanging in the bal-
ance. ship, but only if SAA makes a fresh start. lion, according to the International Air “This work will take a while to realise, but
Transport Association. we hope to be able to announce who that
Last year, before SAA was placed into “SAA has a lot of legacy issues such as strategic partner will be before the end of
business rescue – a process of inde- debt,” Ethiopian chief executive, Tewol- Kgathatso Tlhakudi, Director General of this year.”
pendent administration to revive ailing de GebreMariam, told the South Afri- the Public Enterprise Department, un-
businesses if possible, or shut them can state broadcaster SABC earlier this der which SAA falls, last week said the Despite the logical arguments to keep the
down, the airline had around 40, mostly month. It owes almost 13 Billion Rand government is looking for a partner to re- airline afloat, it remains unclear where the
newer Airbus aircraft. As a result of the (£800 million), mostly in local bond is- launch the airline. government will get the required funds
administration, it handed back the leases sues. to do so. The treasury has predicted a
and kept just nine that it owned outright. “We need a strategic partner for the 300bn rand shortfall in tax revenue this
Before the pandemic, Ethiopian Airline clean-up [of the] airline, with a new bal- year, as the country’s economy struggles
Ethiopian Airlines, Africa’s aviation suc- carried more than 13 million passengers ance sheet,” he said. to bounce back from the devastating im-
cess story, has offered a sort of partner- annually, while SAA moved only 4.5 mil- pact of the COVID-19 pandemic.