29 November 2018

South Africa: SAA Set for Another Bailout From Govt

Cape Town — South African Airways seems to be well on its way to receiving another bailout after the National Assembly approved a 2018 Special Appropriation Bill, which will allow the national carrier to access a R5 billion lifeline.

The airline says it needs R21 billion to survive, while R9 billion of that amount is needed to cover maturing debt by March 2019.

The majority of opposition parties opposed the bailout, calling for the sale of the airline which has been struggling for a number of years, and which they say "received several bailouts from government in the past".

Meanwhile, Deputy Finance Minister Mondli Gungubele has said that "while the airline still needs government support, it is on its way to profitability". This is in sharp contrast to Finance Minister Tito Mboweni's recent statement at an investor conference in New York where he described the national carrier as "loss-making", saying that "we are unlikely to sort out the situation, so my view would be close it down".

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