The National Treasury announced in a press statement on Wednesday that it is “currently considering” State-owned flag carrier South Africa Airways’ (SAA’s) request for a “going concern guarantee” from it. SAA sent its request to National Treasury last month.

“The approval of the guarantee is essential for finalising SAA’s financial statements on a going concern basis,” the statement said. “Once finalised, the Annual General Meeting will be held and the Annual Financial Statements will be tabled in Parliament.”

The National Treasury gave the assurance that it has been cooperating closely with the airline to make certain that SAA has the cash necessary to meet its obligations, when they fall due. To this end, funds had been repatriated from overseas and efforts have been made to obtain additional short-term bridging facilities. SAA still has not used R2-billion of the R14.4-billion in guarantees which it was given and these can be used for further financing.

“National Treasury has been in contact with several of the lenders currently providing SAA with unguaranteed short term facilities and indications are that the banks are not intending to withdraw their facilities at this time,” it stated. “Regular engagements with lenders have been taking place since 2014 and will continue until the airline is stabilised.”

Directed by Finance Minister Pravin Gordhan, the efforts of the National Treasury have three objectives. These are: to achieve the short-term stabilisation of SAA and ensure it has the cash it needs to meet its requirements; to address governance and leadership issues at the airline, such as the creation of a full board and accelerating the process of selecting a new CEO (both steps essential to stabilise it); and to ensure that SAA regains a stronger financial situation in the medium to long term.

The statement quotes Gordhan: “[t]he goal in the longer term is to ensure that the airline is able to operate without support from the state, as should be the case with all State-Owned Entities.” SAA, he affirmed, was, and would remain, open for business.