Gordhan says private sector showing interest in restructured SAA

23rd June 2020

By: African News Agency

  

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The South African government has received proposals from funders and potential airline partners in the private sector eager to play a role in South African Airways if it is restructured into a new national carrier, the ministry of public enterprises said on Tuesday.

"The South African government, during this period of business rescue for South African Airways (SAA), has received unsolicited proposals from private sector funders, private equity investors and potential airline partners for a new national airline that must emerge from the SAA business rescue process," Minister Pravin Gordhan's office said in a statement.

"Government is intent on pursuing credible proposals for investment and strategic partnerships with the private sector, as well as equity participation for employees. Such partners will also introduce technical, financial, and operational expertise."

The statement comes two days before a scheduled meeting of the airline's creditors where they are expected to vote on a plan tabled by the airline's business rescue proposals.

The ministry said it would oppose legal steps taken by SA Airlink to interdict the business rescue team proceeding Thursday's planned meeting.

Gordhan reiterated that the government remains intent on seeing SAA restructured and transformed into a "viable, sustainable and competitive national carrier". It should, he added, have "no legacy financial and operational issues".

SAA has not turned in a profit in almost a decade, and accumulated losses of some R28-billion over the past 14 years. The current national budget made provision for some R11-billion to enable the airline to pay its creditors.  

He said the aviation industry, and in particular the passenger carrier industry, was essential for servicing and growing economic sectors such as tourism, and enhancing business connectivity.

The minister conceded that the Covid-19 crisis has placed airlines around the world under severe strain, but added: "Therefore, there are possibilities for airline partnerships to improve scale and scope and ensure continuity of value creation to the South African economy and long-term sustainability of the aviation industry."

He said the government would like the business rescue effort to result in an airline that flew the right routes at competitive prices, had a modernised fleet suited to hybrid density options, a motivated work force and a competent board of directors.

Gordhan has strenuously opposed liquidation of SAA and clashed publicly with the business rescue practitioners after complained that it was difficult to deliver a rescue plan with no clear commitment of further funding from the state's coffers. 

Edited by African News Agency

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