Photo by: Reuters
Cash-strapped State-owned airline South African Airways (SAA) will need R7.5-billion from next month to fund day-to-day operations into 2019, a presentation by the airline showed on Tuesday.
SAA, which has not generated a profit since 2011, survives on State guarantees and is regularly cited by credit ratings agencies as a drain on the government purse.
It has drawn up an austere turnaround plan that includes cutting jobs and routes in an effort to turn a profit by 2021 and convince lenders to restore credit lines.
The airline said lenders have refused to lend the company R3.5-billion to plug a liquidity hole from December unless they received additional commitments from the government, the presentation showed.
In addition, the national carrier will need R4-billion from March next year, the presentation showed.
"Currently, we don't have an optimal capital structure and, as a result of that, we are dependent on debt which is not good . . . the banks are pushing now for much better support from the shareholder to put in place for us," said SAA interim CFO Deon Fredericks.
SAA is expected to make a R5.2-billion loss in the 2019 financial year and another R1.9-billion loss in 2020 before swinging into a profit a year later, the presentation showed.