The government has again come to the rescue of the financially crippled South African Airways (SAA) with a bailout of R3-billion.
SAA will repay its Citibank debt of R1.8-million and will use the rest as working capital.
In a statement on Friday the Treasury said the money will be transferred from the National Revenue Fund to help SAA with its “immediate working capital requirements” and to avoid defaulting on their Citibank loan.
The transfer was approved in accordance with the Public Finance Management Act.
SAA owed nearly R7-billion. It was recently ordered to pay back R1.8-billion to Citibank by September 30‚ just two months after receiving a government bailout of R2.3-billion to pay back money owed to Standard Chartered Bank.
In August SAA announced its intention to make changes to its network as part of a newly developed five-year plan to bring financial sustainability to the airline.
“The airline remains a strategic asset and in its role as the flag carrier‚ it serves as an economic enabler with direct and indirect benefits across a wide range of economic activity‚” the statement said.
SAA’s new chief executive‚ Vuyani Jarana‚ is starting work on November 1 on a five-year contract.
“Further appointments to fill other critical executive positions will follow shortly‚” the statement said.
As part of the airline’s turnaround plan‚ daily flights from Johannesburg to Port Elizabeth have been slashed by half to only two a day‚ while domestic flights to East London have been reduced from three to two a day.
Flights to Angola’s capital Luanda and Kinshasa in the Democratic Republic of Congo were also trimmed‚ while routes to the cities of Brazzaville‚ Pointe-Noire and Libreville — with connections onward to Cotonou and Douala — are under review.
by Nico Gous