Durban – SAA chairperson Dudu Myeni on Thursday welcomed the National Treasury announcement that it would bail out the airline, saying the new capital injection would stabilise the national carrier.
Reacting to the announcement made by Finance Minister Pravin Gordhan during the presentation of the Budget in Parliament on Thursday, Myeni said she was “optimistic” about the future of the airline.
“SAA will be preserved and not be sold like the Swiss-Air deal which never succeeded,” said Myeni.
Gordhan said SAA would get capital injection, but he did not release the details.
Director-general in the Treasury, Lungisa Fuzile, said the latest bailout would be a substantial amount of money, adding that the department was still working out the details.
Fuzile said the amount, which would also benefit the SA Post Office, would be determined when the mid-term Budget was presented in October.
As a result of the bailout, Myeni said, the leadership of the state-owned airline would ensure that its employees would not be affected by the “turnaround strategy”.
Part of the restructuring includes the merger of SAA with South African Express, which President Jacob Zuma announced in his State of the Nation Address last year.
“SAA has operated for many years without a cash injection with a weak balance sheet, which was compounded by decisions taken by previous leadership through (the) sale of some of its assets,” Myeni said in a statement sent to Independent Media on Thursday.
She said the SAA board would continue to depend on the taxpayers and government support for “our national pride which is revered around the world”.
“SAA operates in a highly competitive environment and, as leadership of the entity, we will continue to do our best and ensure that fundamentals are in place that will lead the business to financial sustainability."
“We continue to make a remarkable contribution to the country’s gross domestic product (GDP), directly and indirectly,” she said.
Myeni did not elaborate on her reference to “the SwissAir deal which never succeeded”, but in late 2001 SwissAir collapsed due to a severe cash shortage.
Myeni reportedly had distanced herself from problems facing SAA, saying that those challenges were because of “bad decisions of the past, including that taken by former chief executive Coleman Andrews who sold and leased back the airline’s fleet”.
Gordhan said after meeting SAA board members last week to discuss turnaround plans he had a good understanding of the airline’s challenges.
“The advisory work that is in progress has clarified the way forward,” he said.