The R3.5 billion South African Airways (SAA) from the Development Bank of South Africa (DBSA) has been met with mixed reaction.
Some analysts are concerned that taxpayers’ money that could have been utilised for valuable projects is now going to bail SAA once again.
They are nonetheless chuffed that the money will be going into the hands of Business Rescue Practitioners instead of executives.
The financial boost has put an end to a month-long search for funding by the government.
Analysts are optimistic that this will help facilitate the business rescue process and avert liquidation, which could have cost taxpayers R40 billion.
Aviation Analyst Connie Mulder says, “As Solidarity, we have mixed feelings about this. It’s called a loan, but it is a bailout. It’s taxpayers’ money being utilised, but at least for a change we have someone we can trust.”
The business rescue process began in December 2019 with the local commercial banks providing the initial post commencement funding of R2 billion.
SAA has not made a profit since 2011 and has been relying on government bailouts to remain solvent.
It lost more than R10.4 billion in the past two financial years.
SAA has recently cancelled some of its domestic and international flights in order to save money.
Mulder has called on the Business Rescue Practitioners not to allow any interference from government.
“There is obviously going to be several attempts at interference. Our hope is that the practitioners must explain to government that you do not have control over this airline anymore,” he says.
The R3.5 billion is expected to help restructure the airline and provide an opportunity for a sustainable and competitive national carrier as well as preserving jobs, wherever possible.
Labour unions and SAA’s Business Rescue Practitioners will be meeting this Friday to discuss the new developments.
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