In mid-April it was announced that South African Airways would begin liquidation proceedings, as the airline started laying off all staff. Well, that didn’t last long…
South African Airways gets bailout
It has today been announced that South African Airways will get a 3.8 billion ZAR (~211 million USD) bailout. This came as a meeting of South Africa’s public enterprises oversight committee decided to provide further funding to state-owned entities for the current fiscal year, which runs through March 2021.
Regional airline SA Express has also received 164 million ZAR (~9 million USD), intended primarily to counter liabilities from aircraft that are leased.
The problem is that there doesn’t actually seem to be a plan to go along with the additional funding. What exactly is this money supposed to be used towards?
No one knows what’s going on with SAA anymore
SAA has been a basket case for a long time — the airline has been losing money since 2011, and the government has provided just enough funding to keep the airline operating, but not enough funding or direction for anything to materially change. Obviously the COVID-19 pandemic has exacerbated the problems at the airline.
The airline entered business rescue as of December 2019, a procedure by which a practitioner takes control of the company, with the goal of maximizing the odds of survival, or at a minimum achieving a better return for creditors than if the company outright liquidates.
In mid-April the government was committed to cutting off SAA, and days later the airline prepared to liquidate and fire all staff… and then nothing happened.
The government’s plan was apparently to form a new national airline in South Africa, which would be separate from SAA, with the goal of making it financially viable.
But now SAA has just received some more funding, and nobody actually knows what’s going to happen anymore.
We’ll see what’s next for South African Airways, if anything. The airline is getting 200+ million USD, but that’s not actually enough to change anything in a material way.
I give up even trying to make sense of this. Heck, who am I kidding, I gave up on making sense of SAA a long time ago…