SAA chief executive Vuyani Jarana told Parliament the airline was still sitting on a R13.8bn debt and would need to strengthen its balance sheet to return to a solid footing in the future.
Jarana said even if the R10bn capital injection was paid to the airline by March, SAA would remain undercapitalised by R9bn.
“You need a stronger balance sheet. There is a lot of work to be done,” he said.
“The problem of SAA is the capital structure and strategy. Once you get that SAA will be back on its feet.”
SAA has already recorded R2.1bn in losses in the first two quarters of the 2017/18 financial year.
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Jarana said R7bn of the R10bn bailout would be used to repay lenders, while R3bn had been used to address short-term working capital challenges.
He said lenders had extended loans to March next year after the annual general meeting where SAA would table its financials.
Auditor-General Kimi Makwetu is currently busy with the financial statements of the airline, while Deputy President Cyril Ramaphosa leads a team of cabinet ministers that is working on the merger of SAA with Mango and SA Express.
SAA said it was unable to generate enough cash and had to rely on debt to finance its operations as domestic and most international routes were not profitable.
President Jacob Zuma has been reported to be talking to Qatar to come in as equity partner at SAA.
This followed the announcement by Finance Minister Malusi Gigaba in his Medium Term Budget Policy Statement in October that they would no longer provide guarantees to state-owned entities (SOEs) without conditions.
Gigaba said the National Treasury would set tough conditions for SOEs to get guarantees.
He said SAA particularly needed an equity partner that would help it to improve its liquidity. However, Gigaba has consistently said that the government would not sell the national carrier.
SAA chief financial officer Phumeza Nhantsi said the airline projected a loss of R1.6bn for the first two quarters of the current financial year.
Nhantsi said the figure, however, escalated to R2.1bn and losses to the end of March were now projected at R4bn.
She said the airline was, however, working to to improve it finances, confirming that the current debt was R13.8bn at present.
“We are in the process of improving liquidity with the injection the company has received,” she said.