The airline has not turned a profit for almost a decade
PRETORIA, April 16 (NNN-AGENCIES) — The South African government has refused a request from the beleaguered national carrier for $500m worth of emergency funding.
South African Airways now faces liquidation, with the possible loss of 5,000 jobs.
The airline has not turned a profit since 2011 and has received more than $1bn worth of bailouts over the past three years.
It has suspended most domestic and international flights because of the coronavirus pandemic.
The airline’s administrators, who were put in charge in December, were told by the state to instead source cash from available resources, according to a letter they sent to affected parties.
“We are currently assessing the impact of this development on the business-rescue process and will communicate any decisions to be made,” they said in the letter.
South African Airways, which began operations in 1934, has racked up R26 billion in losses over the last six years and has depended on a series of state bailouts to keep operating. The grounding of all of its passenger flights, aside from charters to repatriate stranded citizens, due to the coronavirus lockdown have further decimated its revenue stream.
Finance Minister Tito Mboweni has long advocated shutting off funding for the airline, and earlier Tuesday cited the carrier’s closure as a way to save funds as the country deals with the fallout of the coronavirus pandemic. Even before the Covid-19 outbreak ground global travel to a halt, the administrators had cut routes and started consultations with more than 4,700 employees about job losses.
SAA’s external debt is guaranteed by the state in the event of the carrier’s collapse. — NNN-AGENCIES
