S.Africa national carrier SAA exits business rescue
Administrators of South Africa’s cash-strapped flag carrier SAA said Friday they had handed control back to management, bringing to an end a 17-month restructuring.
Loss-making South African Airways (SAA), one of the continent’s largest airlines, was placed under a state-approved rescue plan in December 2019 in an effort to save it from collapse.
The airline, Africa’s second largest after Ethiopian Airlines, had not posted a profit since 2011, instead surviving for years on state bailouts.
A symbol of the mismanagement of state-owned enterprises that characterised ex-president Jacob Zuma’s reign, the airline was forced to abandon many routes even before the Covid-19 pandemic.
Now the administrators “have effectively discharged the business rescue and handed over the operations of SAA back to its board and executive team with immediate effect,” they said in a statement, adding that the company is now “solvent and liquid”.
The administrators said they had received 7.8 billion rand ($538 million) out of a 10.5 billion rand bailout allocated by government.
Under the restructured business model, SAA’s debt should be paid over the next three years, they added.
The Department of Public Enterprises welcomed the development which “signals the exit” of the rescue team at the national carrier.
But the ministry warned that more work needed to be done to ensure capital and crucial technical and commercial expertise needed are brought in to shape a competitive airline.
SAA is set to be replaced by a new airline after years of mismanagement and debt.
This month the carrier’s interim board named chartered accountant Thomas Kgokolo as its fifth acting CEO in five years.