Picture: Rogan Ward/Reuters/African News Agency (ANA)
Picture: Rogan Ward/Reuters/African News Agency (ANA)

Government has received proposals from private sector on new airline

By Zintle Mahlati Time of article published Jun 23, 2020

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Johannesburg - The Department of Public Enterprises (DPE) says the government has received several proposals from private funders, equity investors and potential investors for the formation of a new airline that could emerge from the South African Airways business rescue process.

The government said it was interested in entertaining the proposals which could provide diverse opportunities in the formation of a national airline.

"Government is intent on pursuing 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.

"As the shareholder on behalf of the government, the Department of Public Enterprises (DPE), will engage interested parties constructively in pursuit of government’s national developmental and strategic agenda to rebuild our economy in a post-Covid-19 era," the department said on Tuesday in a statement.

The department said it was aware of the hardships faced by airlines during the coronavirus pandemic and an airline with a strategic framework to help rebuild the country's economy needed to be supported.

"The DPE is cognisant that airlines across the world have been facing severe drop in flights due to Covid-19, leading to financial and other pressures. Therefore, there are possibilities for airline partnerships to improve scale and scope and ensure continuity of value creation to the South African economy and long-term sustainability of the aviation industry.

"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," DPE said.

This statement comes as SAA's business rescue practitioners are set to host a creditors meeting on Thursday. SA Airlink has threatened to approach the courts to halt the meeting as it believes SAA should be liquidated. SA Airlink is owed R700 million by SAA for services rendered on its behalf.

The DPE said on Monday that it would oppose any court action by SA Airlink or SAA unions which aimed to halt the hosting of the creditors meeting.

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