JOHANNESBURG - South African Airways on Tuesday said even with a recent government injection of R10 billion ($709 million), the struggling airline will remain under-capitalised with a negative equity position of over R9 billion, a presentation to parliament showed.
The national airline has been relying on government guarantees to keep it solvent and has been cited by major rating agencies as a threat to South Africa’s economy.
A large number of people have called for SAA to be abandoned by government.
Finance Minister Malusi Gigaba has given his reasoning as to why government will be holding on to National carrier.
Speaking at the Business Report Ignite Breakfast event the Minster gave reasons to government's decision to keep SAA as a state-owned enterprise.
The BRIgnite event was held in order to further unpack issues surrounding Gigaba's Mid-Term Budget Policy Statement.
"SAA has about 10 500 employees and for government to lose SAA would be a huge blow to the economy and to the employees that would lose their jobs and have their families affected. SAA is a beacon and shinning spotlight for South Africa and selling it would have a trigger effect on other lenders and people who borrow money from South Africa. Selling SAA would create a very bad impression for our economy."