SAA in limbo as government considers bailout

Gaz{M}

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There are different funding mechanisms. A bailout is a direct cash transfer from Government to SAA. This cannot be done this financial year as there is no legal way or funds available.

The next option is a Government guarantee for new debt that SAA would need to be granted from a bank. This is still an option. But then what bank would lend to SAA at this stage, unless at high interest with a very short payback period.
 

Segg

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This as well. My question should have been : "Any SAA planes flying and how full are they?"
If anything I would expect their pax loads to decrease after the holiday/tourist season, most people would have booked tickets way in advance of this current liquidity crisis - especially foreign visitors on code-share agreements from other star alliance airlines (this may end up saving the day for SAA)
 

Gaz{M}

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If anything I would expect their pax loads to decrease after the holiday/tourist season, most people would have booked tickets way in advance of this current liquidity crisis - especially foreign visitors on code-share agreements from other star alliance airlines (this may end up saving the day for SAA)
Which is exactly the problem. SAA received their ticket money months ago. Now they need to fuel planes and pay fees and taxes on flying those people around, with money they don't have, because nobody is buying new tickets for 2020.
 

konfab

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The DA needs to start attacking the ANC on this. All of these SOE bailouts should be measured in units of RDP houses.
 

Segg

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Which is exactly the problem. SAA received their ticket money months ago. Now they need to fuel planes and pay fees and taxes on flying those people around, with money they don't have, because nobody is buying new tickets for 2020.
I can see that happening with a regular business trading recklessly, however most airlines hedge their fuel prices and other major orders etc months in advance, and I'm sure Star Alliance (and partners) are keeping a very close eye on the situation

I'm not too sure on the timing of when code share money is transferred... And whether tourists overseas are as aware of the situation as we in SA are

If SAA suddenly loses it's code sharing agreements, then I'd start to panic - but for now it seems it's partners still have faith that it will continue operating

Here are their partners
 

Jopie Fourie

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The bailouts cannot and never will it end. The bailouts will only stop when there are no longer sufficient taxes generated by the Government. This is when all bailouts, grants, free rides and corruption ends.
 

JayM

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The bailouts cannot and never will it end. The bailouts will only stop when there are no longer sufficient taxes generated by the Government. This is when all bailouts, grants, free rides and corruption ends.
Nonsense. There's still trillions to be taken from pension funds, so we're good for a while.
 

BBSA

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The DA needs to start attacking the ANC on this. All of these SOE bailouts should be measured in units of RDP houses.
And job opportunities.

Sadly it will be lost on the average South African.
 

Segg

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South African Airways must urgently go into voluntary business rescue, President Cyril Ramaphosa has ordered.

In a leaked letter, secretary of cabinet Cassius Lubisi, said Ramaphosa made the order due to the "dire situation" facing the embattled national carrier.

"This is the only viable route open to the government to avoid an uncontrolled implosion of the national airline," the letter reads.

"The voluntary business rescue approach will also prevent liquidation applications by any of SAA's creditors, which would land the airline in an even worse position.

"We remain seized with the SAA crisis and will keep members of the executive informed at all material times."
Link

Or as the Americans would say - Chapter 11 Bankruptcy
 
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