SAA has burnt through R2bn of funding in less than 60 days. Instead of the agreed-upon R2bn, R3.5bn has been secured to keep SAA in the air. One wonders how much more will have to be coughed up before the airline becomes sustainable?
First came the announcement that the ANC had decided at its recent National Executive Committee (NEC) meeting that SAA must be retained as the national airline. Then came the announcement that the Development Bank of SA (DBSA) would commit R3.5-billion in funding to the ailing airline, with an immediate draw-down of R2-billion.
This raises immediate questions about just how independent the business rescue process actually is and how much leeway the practitioners, Les Matuson and Siviwe Dongwana, have to do their jobs free of interference.
The airline was placed under voluntary business rescue in early December 2019 and the practitioners committed to providing funders with a comprehensive turnaround plan by the end of February 2020.
The aim of the process is to either rescue SAA through restructuring - in order to maximise the likelihood of the state-owned airline continuing on a solvent basis - or to develop a plan that would deliver a better return for creditors...