Creditors approve South African Airways’ rescue deal
Creditors of South Africa’s flag carrier SAA approved Tuesday a restructuring plan for the cash-strapped airline, the government said.
reditors of South Africa’s flag carrier SAA approved Tuesday a restructuring plan for the cash-strapped airline, the government said.
The deal will require at least a billion dollars in funding.
Loss-making South African Airways (SAA), one of the continent’s largest airlines, was placed under a state-approved rescue plan in December in an effort to save it from collapse.
SAA is to be replaced by a new and competitive airline after years of mismanagement and debt.
“At a meeting convened by the business rescue practitioners (BRPs) for SAA, 86% of creditors voted to support a business rescue plan for the airline,” said the Department of Public Enterprises in a statement.
The government said it believed that the decision was “a much better outcome for creditors and SAA employees than liquidation”.
“The department hopes that a new SAA can reclaim market share while fighting to compete more in the emerging market space – notwithstanding the impact of the COVID-19 pandemic that will constrain the aviation industry for some time into the future,” it said.
Thousands of jobs are set to be shed under the plan.
SAA employs more than 5,000 workers and is Africa’s second-largest airline after Ethiopian Airlines.
Like most South African state-owned enterprises, it has failed to make a profit for more than a decade and survived on government bailouts.