The DPE said it had received unsolicited proposals from private sector funders, private equity investors and potential airline partners for a new national airline that must emerge from the SAA business rescue process. Photo: African News Agency (ANA) Archives
The DPE said it had received unsolicited proposals from private sector funders, private equity investors and potential airline partners for a new national airline that must emerge from the SAA business rescue process. Photo: African News Agency (ANA) Archives

New airline that must emerge from SAA attracts potential investors

By Dineo Faku Time of article published Jun 24, 2020

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JOHANNESBURG – The Department of Public Enterprises (DPE) on Tuesday announced that the government had attracted potential funders for establishing a new national carrier, without naming the investors.

The department said it had received unsolicited proposals from private sector funders, private equity investors and potential airline partners for a new national airline that must emerge from the SAA business rescue process. It said that it would pursue credible proposals for investment and strategic partnerships with the private sector, as well as equity participation for employees.

“Such partners will also introduce technical, financial, and operational expertise,” the DPE said.

The government has embarked on establishing a new national airline after the financially distressed SAA went into voluntary business rescue last year.

As part of the business rescue plan, SAA’s business model, route network and cost base, will be restructured, starting with a capital injection from the government to restart operations.

“The government is committed to support the formation of such a new airline with no legacy financial and operational issues which will be managed by competent, competitive and skilled personnel who have strategic and technical capabilities which are critical to the success of the new carrier,” said the DPE, adding that the government would like to see the new airline offer with the right routes, at competitive prices in line with the business rescue plan published earlier this month.

The DPE said the government wanted the new airline to have an efficient and modern aircraft fleet with hybrid density options acquired at competitive rates resulting in cost efficiency. It said it also wanted a motivated workforce and the appointment of an effective, competent, and empowered board of directors with appropriate aviation experience.

The DPE said that as the shareholder on behalf of the government, it would engage interested parties constructively in pursuit of the government’s national agenda to rebuild the economy post the coronavirus pandemic.

“The government has expressed its intent and commitment to fundamentally restructure and transform SAA into a viable, sustainable and competitive national carrier,” the department said. “The broader aviation industry and the passenger air transport sector specifically, is essential for servicing and growing economic sectors, including tourism, business connectivity and cargo carriage.”

SAA business rescuers Siviwe Dongwana, and Leslie Matuson have proposed the restructuring of SAA with the commencement of flights in the near future as lockdown measures eased and air travel resumed.

They said that the proposed new airline, with 1 000 employees, would commence with domestic travel under level 3 and 2, with international travel anticipated under level 1.

The rescuers said the new airline would slowly ramp up operations and increase its fleet of aircraft in line with the developments of the aviation sector.

The DPE said that it was cognisant that airlines across the world have been facing a severe drop in flights due to the Covid-19 pandemic.

BUSINESS REPORT

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