SAA scrambling to get R2bn as deadline looms - source

Jopie Fourie

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South African Airways is apparently scrambling to obtain R2bn before November 20, a source told Fin24 on Thursday.

Asked about the alleged rush, SAA spokesperson Tlali Tlali told Fin24 that the R2bn was "always part of our requirements for working capital so this is not new".

He said SAA is in the process of "procuring that required amount"

Over the past 13 years, the flag carrier has incurred over R28bn in cumulative losses. In last week's mid-term budget, Finance Minister Tito Mboweni announced that the state would pay off SAA's government-guaranteed debt of R9.2bn "over the next three years" to honour the airline's contractual obligations.

Asked for his thoughts on the claims of a scramble to obtain the funding in time, Dr Azar Jammine, director and chief economist of Econometrix, said that while he did not have specific knowledge about the R2bn, this is the kind of thing that has been happening at SAA over the past few years. The airline, he said, is given lines of credit which then expire and has to borrow money anew.

"The commercial banks have been getting a bit sticky about lending money to SAA without the necessary (state) guarantees because of the huge losses the airline made," Jammine told Fin24. He explained that the provision of such a guarantee by the government, should a bank require it to give SAA a loan, is different to a "bailout" where government would simply give SAA the money.
 

Jopie Fourie

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How much did those new aircraft they just took delivery of set them back?
It does not matter what it cost the SAA. They urgently need to start generating income as they are insolvent. Leave the money for us taxpayers to take care of.
 

Kosmik

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Ah but we can buy new planes which have special seat configurations that only government can afford? Right????
 

ponder

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Part of our african renaissance! Stop being so racist and eurocentric...
 

BBSA

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How many planes do they have available to sell on an urgent auction?
 

garp

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They keep getting bailed out, but then it seems that they don’t make any effort to turn things around. This is our money. It’s outrageous. No bailout should be granted without simultaneously firing the leadership and thrashing out a comprehensive turnaround plan.
 

MidnightWizard

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HOW LONG -- before the SA taxpayer is forced to -- bail out COMMERCIAL banks -- as has happened in the US after the sub-prime housing boom BOMB ?
Poor little taxpayer -- the dude that is always expected to pay up and fix all the fsuckups --and -- NEVER complain !
 

chrisc

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Let them close up shop. There are plenty of other airlines ready to step in
 

ponder

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HOW LONG -- before the SA taxpayer is forced to -- bail out COMMERCIAL banks -- as has happened in the US after the sub-prime housing boom BOMB ?
Poor little taxpayer -- the dude that is always expected to pay up and fix all the fsuckups --and -- NEVER complain !
SA banking laws are pretty rigid compared to US. There has been a bunch of repealed financial service regulations starting in the 1980s leading up to the 2007 crisis.
 

Milano

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Eventually when taxpayers have no more to give they have to come after your pensions. It is inevitable.
 
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