File picture: Rogan Ward/Reuters
File picture: Rogan Ward/Reuters

Cabinet supports new airline from restructured SAA

By Siyabonga Mkhwanazi Time of article published Jun 26, 2020

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The cabinet has come out in support of the establishment of a new airline following the restructuring of SAA.

The cabinet said on Friday the new airline would play a key role in the aviation sector. SAA is in deep financial trouble with the shareholder meeting postponed to July.

The national carrier required a financial injection of R16 billion from the government. The unions have opposed any liquidation of the airline.

In a statement, the cabinet said it had received a progress report on the SAA business rescue process. It maintained that a positive vote for the business rescue of SAA was the most viable option for the airline.

"It supports the proposal for a new airline and the concerted effort to mobilise funding from various sources including from potential equity partners for the  uptake of the new airline. 

"This is the only realistic pathway from which a new viable, sustainable, competitive airline that can provide an integrated domestic, regional and international services," said the cabinet.

A week ago, Deputy Minister of Public Enterprises Phumullo Masuale told the standing committee on public accounts there were seven parties interested in buying a stake in the airline. But he would not list the interested parties.

The cabinet said it had full confidence in creditors approving the business rescue plan for SAA.

"Cabinet maintains that a positive vote from creditors to finalise the business rescue process is still the most viable and expeditious option for the national carrier to restructure its affairs which include its business, its debt and other liabilities."

Political Bureau

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