South African Airways rescue plan needs over 10 bln rand to work

Record ID: 1557546

  • Title: South African Airways rescue plan needs over 10 bln rand to work
  • Date: 17th June 2020
  • Summary: CAPE TOWN, SOUTH AFRICA (JUNE 17, 2020) (REUTERS VIA ZOOM) (SOUNDBITE) (English) AVIATION ANALYST, LINDEN BIRNS, SAYING: "Airlines around the world right now are taking on more and more debt and are going to have to probably take on even more just in order to cover their costs going through the next three quarters. It's early days, it's very difficult to know the projectio
  • Embargoed: 1st July 2020 16:10
  • Keywords: bankruptcy protection business rescue cash-strapped airline coronavirus lockdowns state-owned South African Airways (SAA) suspended commercial passenger flights
  • Location: JOHANNESBURG AND CAPE TOWN, SOUTH AFRICA
  • City: JOHANNESBURG AND CAPE TOWN, SOUTH AFRICA
  • Country: South Africa
  • Topics: Company News Markets,Economic Events
  • Reuters ID: LVA004CIRED07
  • Aspect Ratio: 16:9
  • Story Text: Administrators at state-owned South African Airways (SAA) said on Tuesday (June 16) the government needed to find more than 10 billion rand ($579.47 million) of new money for a long-delayed plan to rescue the cash-strapped airline.
    The administrators took over SAA in December, when the company entered a local form of bankruptcy protection called business rescue after almost a decade of financial losses.
    Their rescue plan has been repeatedly delayed amid fierce wrangling over SAA's future, with senior officials and trade unions applying pressure for the airline to be saved despite the COVID-19 pandemic exacerbating its longstanding frailties.
    "Assuming that all things equal and the plan is viable, the crucial thing is going to be making sure that A) there is governance B) that the right people are appointed and hired to run the carrier without political interference - there needs to be stability," said Linden Birns, who is head of industry insider, Plane Talking PR.
    SAA has not made a profit since 2011 and has burned through more than 20 billion rand of bailouts in the past three years.
    "It's early days, it's very difficult to know the projection of how viable this particular business plan is for SAA without being able to really see through the fog of the current crisis. And I think generally what happens in cases like this, people tend to estimate what's really required and what's necessary," Birns said.
    The airline suspended commercial passenger flights in late March, when the government imposed one of Africa's strictest coronavirus lockdowns.
    (Production: Shafiek Tassiem, Sisipho Skweyiya)
  • Copyright Holder: REUTERS
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