Talks about the bailout comes after SAA CEO Vuyani Jarana tendered his resignation earlier this week. He cited the lack of long-term sustainability and SAA’s penchant for not paying wages as some of the reasons for stepping down.
He was also frustrated by SAA’s ability to compete in the market and said the red tape of the position was frustrating. Jarana served as CEO since November 2017 and was hoping to fix SAA within four years. Bless him.
Bailout needed to make it through the year
The airline’s head of operations, Zukisa Ramasia, was appointed as acting CEO. The SAA team said on Friday that the airline needs an R4 billion bailout from the government to get through the financial year.
In addition, a bailout will also help the embattled airline to renegotiate its loan terms with the bank. As reported by eNCA, SAA board member Martin Kingston said in a news briefing on Friday:
“We are currently operating at a loss and that is the background to the request we’ve made for R4 billion of support for the current financial year. We are in discussion with lenders about repaying the R3.5 billion and extending the R9.2 billion over a protracted period of time.”
He explained that repaying the R3.5 billion debt will open the door for them “to access additional liquidity for the current financial year”. SAA has not made a profit since 2011.
SAA always in need of a bailout
This is also not the first time the airline needed a bailout from the government or private lenders. According to Africa Check, the government spent – some might say wasted – R29 billion on SAA from 1999 to 2017.
In October 2017, SAA received an R1.8 billion loan. Twelve months later, they received R5 billion and just three months after that, another R3.5 billion. However, the latter came from private lenders.
So, to sum it all up; SAA to date walked off with just a smidgen less than R40 billion, over a period of two decades. Imagine.