South African Airways (SAA) has requested another ZAR 4bn from the government in an attempt to keep the struggling airline afloat, according to a report by the Sunday Times. The airline continues to operate at a loss and has a ZAR 3.5bn short-term loan which will be depleted at the end of June 2019, along with a long-term ZAR 9.2bn loan.
SAA board member Martin Kingston said that the board was worried about the state of the economy and how it may impact the government’s decision to bail out the airline. Economist Mike Schussler told the Sunday Times that the airline is “indebted to the nth degree”, and that it probably wouldn’t survive. “The end of the line is coming soon. We are in a deep crisis, we cannot save every SOE and I think at this point in time Eskom is much more important than SAA,” Schussler said.
“If we give that ZAR 4bn to SAA we will feel the impact of a downgrade.”
CEO’s resignation
SAA CEO Vuyani Jarana resigned from his position at the airline last week, stating that he planned to leave the company on 31 August 2019. However, the Sunday Times reported that he would now vacate his position immediately and would be succeeded by Zukisa “Zuks” Ramasia as acting CEO of SAA. Jarana said he quit the airline due to a lack of government funding to help turn around the airline, citing a “lack of commitment” as one reason for his resignation.
Jarana, the former head of Vodacom’s enterprise division, was appointed as the new CEO of SAA in August 2017. He was previously chief operating officer at Vodacom before heading up the enterprise division.