South African Airways faces bankruptcy, asks government for cash

Published on : Tuesday, August 8, 2017

 

SaaSouth African Airways has suffered years of losses and needs £743 million (13 billion rand) to save itself from being bankrupt.

 

The country’s biggest fleets had to face the turmoil due to unprofitable routes and older aircraft.

 

 

In July, the carrier received state funds to repay £1.14 billion (20 billion rand) in government to keep it active in the market, however Reuters reported that more cash was needed to keep it in a working condition.
 

According to the credit ratings agencies SAA should reform itself if it wants to further proceed with its operations. Since March the airline has been in recession and it just drained the country’s resources.

 

Malusi Gigaba, Finance Minister commented that talks are on about a bailout and a medium term budget statement in October will have the necessary announcements.

 

The current cash will be used in debt obligations and cover operating cost.

 

 

The airline tentatively will garner profit by 2019 on an EBIDTA (earnings before interest, taxes, depreciation and amortization) and turnaround strategy would be aggressively followed to bring changes.

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