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South African government falters on SAA restructuring

written by Sandy Milne | June 18, 2020
South African Airways Airbus A330-300 (Australian Aviation archives)

The South African government has addressed a long-awaited rescue plan for the country’s flag carrier, which calls for as much as US$580 million in fresh bailout funding.

Released by SAA’s administrators in recent days, the blueprint looks to turn the tide for the cash-strapped airline, which entered administration in late April following a decade of losses. At the time, Reuters reported that the airline offered severance packages to its workforce of roughly 5,000 people, after the central government said that it would not provide more funds for rescue efforts.

However, government officials have expressed doubt as to whether the plan will be enough to create “a viable and sustainable national carrier”, stating that the restructuring plan “may not have been adequately accomplished”.

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The opposition Democratic Alliance (DA) was even more critical of the plan, likening the airline to “a bankrupt black hole”.  The DA has urged Finance Minister Tito Mboweni to oppose the plan, and has pressed the government to abandon the state-owned airline entirely.

“We are of the view that it violates the Competition Act, as the airline will get an unfair competitive advantage over the other South African airlines,” said a spokesperson for the DA.

“Of the limited options left for SAA, another bailout must not be on the list.”

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