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Thursday airline updates: SAA given 25 days to restructure, funding boost from government

written by Dylan Nicholson | May 21, 2020

On 15 May, the South African government requested a business plan for South African Airways within 25 days. Plans to rescue the airline have been ongoing since late 2019 and, even allowing for the challenges of the coronavirus pandemic, the government has not been satisfied with progress.

The standing committee on public accounts has asked for a full business plan for South African Airways from its rescue practitioners and advisers and wanted this delivered within 25 days from 15 May, along with a full schedule of fees.

The committee is frustrated at delays in the rescue plan, rising costs, and a lack of interaction with rescue practitioners. Committee chairman Mkhuleko Hlengwa said, “The more they provide answers, the more questions arise. It is a case of classical musical chairs. It’s what has characterised the operation over the past five months. It’s what has landed us with a rand 10 billion bill.”

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Despite the restructuring underway, the South African government was proving resistant to any sale of assets or talk of liquidation. This was despite them declining to continue funding the national carrier.

However it now appears the South African government may have reversed its April stance of no more funding. Flight Global has reported that $212 million has been set aside for South African Airways this financial year. A further $9 million has been set aside for offshoot SA Express. The South African financial year runs from 1 March to the end of February.

Deputy director-general of the Department of Public Enterprises, Kgathatso Tlhakudi, quoted this amount when appearing before the parliamentary portfolio committee on public enterprises on Wednesday.

It must however be noted that these funds are provisional and may be a promise the government cannot uphold.

In other airline news:

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