South Africa national carrier SAA exits business rescue

South African Airways Airbus A330 (A330-243) airplane as seen on 19 November 2019 at Munich International Airport MUC EDDM named Franz Josef Strauss, Flughafen Munchen, capital of Bavaria, Germany. The aircraft has the registration ZS-SXX with 2x RR jet engines. South African Airlines SA SAA SPRINGBOK is a state owned flag carrier airline of South Africa, Star Alliance member headquartered in Airways Park at O.R Tambo International Airport in Johannesburg JNB hub. (Photo by Nicolas Economou/NurPhoto via Getty Images)
South African Airways Airbus. (Photo by Nicolas Economou/NurPhoto via Getty Images)

Administrators of South Africa’s cash-strapped flag carrier SAA said Friday they had handed control back to management, bringing to an end a 17-month restructuring.

Loss-making South African Airways (SAA), one of the continent’s largest airlines, was placed under a state-approved rescue plan in December 2019 in an effort to save it from collapse.

The airline, Africa’s second-largest after Ethiopian Airlines, had not posted a profit since 2011, instead, it was surviving for years on state bailouts.

A symbol of the mismanagement of state-owned enterprises that characterized ex-president Jacob Zuma’s reign, the airline was forced to abandon many routes even before the COVID-19 pandemic.

Now the administrators “have effectively discharged the business rescue and handed over the operations of SAA back to its board and executive team with immediate effect,” they said in a statement, adding that the company is now “solvent and liquid”.

The administrators said they had received 7.8 billion rand ($538 million) out of a 10.5 billion rand bailout allocated by the government.

Under the restructured business model, SAA’s debt should be paid over the next three years, they added.

The Department of Public Enterprises welcomed the development which “signals the exit” of the rescue team at the national carrier.

But the ministry warned that more work needed to be done to ensure capital and crucial technical and commercial expertise needed are brought in to shape a competitive airline.

SAA is set to be replaced by a new airline after years of mismanagement and debt.

This month the carrier’s interim board named chartered accountant Thomas Kgokolo as its fifth acting CEO in five years.

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