Government and labour unions working on plan for “new SAA”

South Africa’s Public Enterprises Department and labor unions are working together on a business model for a new national carrier that will replace the embattled South African Airways.

The new airline will be funded through a variety of options such as strategic equity partners, funders and the sale of non-core assets, the Ministry of Public Enterprises said in a statement Wednesday. The parties are still of the view that the state must continue to play a role.

The administrators running SAA had proposed firing the entire workforce to stave off liquidation after a request for state funding was rejected in April.

However, Public Enterprises Minister Pravin Gordhan strongly objected to that plan and announced his ambitions for the creation of a new airline.

The administrators are now proposing the government provide a R21 billion ($1.2 billion) bailout to help repay debt and resume operations after the lifting of Covid-19 travel bans.

President Cyril Ramaphosa reiterated the government’s intention to revive SAA on May 31, saying he sees a bright future for the carrier.

“It is essential to build a leadership coalition which is robust and strong enough to find solutions, and establish the foundations of a new airline with a growth path,” the Ministry said on Wednesday.

Now read: What will happen to Kulula and when it will start flying again

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Government and labour unions working on plan for “new SAA”