The National Assembly has passed the 2018 Special Appropriation Bill that will allow government to provide South African Airways a R5 billion bailout.
The airline has told Parliament that it requires R21 billion to survive. R9,2 billion of this amount, which is mainly to cover maturing debts, is due by March next year.
The majority of opposition parties opposed the appropriation bill. They say the airline has been bailed out too many times and government should consider selling it.
Deputy Finance Minister Mondli Gungubele says, however, that while the airline still needs government support, it is on its way to profitability.
“In SAA as we speak all domestic routes except PE (Port Elizabeth) are profitable at gross profit margin level meaning that they’re able to cover aircraft leasing costs, pilot salaries , cabin crew salaries, fuel, food, navigation and lending costs. Now that the margins have returned, SAA is increasing frequencies in the domestic market. Joburg to EL (East London) and Joburg to CT (Cape Town) routes to claw back the market share.”
Click below to watch SAA’s CEO talk about the airline’s future.