CAPE TOWN - South African Airways (SAA) needs a new capital injection “now” to stay afloat and was in discussions with banks and the National Treasury for “an open credit line”, its chief executive said on Tuesday.
SAA, which has not generated profit since 2011, is regularly cited by ratings agencies as a drain on the government purse and has already received state guarantees totaling nearly R20 billion.
“We do need access to capital to sustain the operations and we are having discussions with Treasury, as well as the banks around how we have an open credit line,” Vuyani Jarana, the chief executive, told parliament.
Asked by an opposition parliamentarian when the airline would need to access billions of rands of extra state support, Jarana responded “Now”.
The National Treasury said that SAA needs an equity partner to pump money into the company to address a liquidity crisis and to help with the implementation of a turnaround plan.
The company’s results for the year to March 31, 2017 — which had been delayed after the company received a R10 billion government bailout last year — showed a deepening loss of R5.6 billion, a more than threefold increase from the previous year’s R1.5 billion loss.
SAA will need to repay bank debts of close to 10 billion rand by March 2019, Jarana said.