SA Gov't Bails Out SAA Again

Discussion in 'News & Announcements' started by JGRaider, Jul 14, 2017.

  1. JGRaider

    JGRaider AH Fanatic

    Joined:
    Dec 6, 2012
    Messages:
    503
    Video/Photo:
    15
    Likes Received:
    368
    Location:
    West Texas
    Member of:
    B&C, DSC
    Hunted:
    US, Mexico, S Africa, Namibia
    Poached from another forum........



    [​IMG] posted 07-14-2017 5:23 PM
    South African government bails out SAA
    Jul 7, 2017 Alan Dron
    EMAIL
    INSHARE

    COMMENTS 0
    South African Airways A340-200
    South African Airways A340-200
    Wikimedia

    The South African government has had to step in to pay a looming loan repayment from South African Airways (SAA) to prevent the national carrier from defaulting.

    The move follows a $350 million bailout by the government, which had to provide guarantees for the airline in 2016.

    In a statement, the South African Government National Treasury said it had transferred funds to SAA “to pay back its debt to Standard Chartered Bank, thereby preventing a default.”

    Failure to have done so “would have triggered a call on the guarantee, leading to an outflow from the National Revenue Fund and possibly resulting in elevated perceptions of risk related to the rest of SAA’s guaranteed debt.”

    The parliamentary opposition party, the Democratic Alliance, described the government’s action as “a blow to the credibility of both the SAA board and to National Treasury. This emergency funding for SAA indicates the serious crisis that SAA has been mismanaged into.”

    SAA has been struggling financially for several years. It made a net loss of ZAR1.5 billion ($111 million) for the year ended March 31, 2016, the last period for which figures are available. This, however, was a considerable improvement on the previous year, when the net loss reached ZAR5.6 billion.

    The airline has been hamstrung by an increasingly elderly and fuel-inefficient long-haul fleet based around the Airbus A340. It has also been plagued by unsettled management, with a succession of CEOs and chairmen in recent years, several of whom have been suspended for alleged misdemeanors.

    Like many African airlines, SAA is also coming under pressure from the three big Middle Eastern carriers, which are rapidly expanding into Africa and siphoning off traffic to their Gulf hubs.

    The government has been seeking to recapitalize SAA for some time, the National Treasury said. “Several options are being explored and an update will be provided during the Medium Term Budget Policy Statement in October 2017. Government will do everything in its power to ensure that the airline’s turnaround strategy is implemented. The airline remains a strategic asset and in its role as flag carrier, it serves as an economic enabler with direct and indirect benefits across a wide range of economic activity.”
     

  2. BRICKBURN

    BRICKBURN SUPER MODERATOR CONTRIBUTOR GOLD BENEFACTOR AH Ambassador

    Joined:
    Aug 5, 2010
    Messages:
    18,512
    Video/Photo:
    414
    Likes Received:
    10,211
    Hunted:
    Namibia, South Africa, Botswana, Mozambique, Canada, USA, Mexico
    Plenty of news sources in SA on this topic.

    Banks in the US, Airlines in SA, ...............
     

  3. spekieries

    spekieries AH Senior Member

    Joined:
    Oct 22, 2011
    Messages:
    53
    Video/Photo:
    1
    Likes Received:
    46
    Member of:
    SA Hunters
    Hunted:
    RSA
    And so money from taxpayers to create jobs, to improve infra structure and to improve the overall plight of the poor is wasted on a poor setup without a proper business plan even though they have a monopoly. Can not even organise a piss up in a brewery.
     
    CAustin likes this.

  4. CAustin

    CAustin BRONZE SUPPORTER AH Ambassador

    Joined:
    May 7, 2013
    Messages:
    11,428
    Video/Photo:
    94
    Likes Received:
    7,547
    Member of:
    Courtney Hunting Club, NRA Life Member, SCI Kansas City Chapter
    Hunted:
    South Africa, Kalahari, Northwest, Limpopo, Gauteng, APNR Kruger Area. USA Georgia, South Carolina, Arkansas, New Mexico, North Carolina and Texas
    The OP notes that the airline struggles because of inefficient fuel use of the A340 on long haul routes. fuel prices are way down as compared to just three years ago so the fuel consumption is not the current underlying problem........it's management and competition.
    Also it's not the first time a government has stepped in to bail out an industry. Can we all say General Motors, Chrysler or a number of US banks??
    And let's not forget that all the Middle East airlines are constantly subsidized by their governments so the playing field is not equal.
     
    Philip Glass likes this.

  5. Brent in Az

    Brent in Az AH Elite

    Joined:
    Feb 25, 2015
    Messages:
    1,480
    Video/Photo:
    1
    Likes Received:
    2,022
    Location:
    Arizona
    Hunted:
    USA - Az, NM, CO, MT, MN.
    Hopefully, SAA is not skimping on Aircraft maintenance.
     

  6. sestoppelman

    sestoppelman AH Legend

    Joined:
    Apr 25, 2010
    Messages:
    4,532
    Video/Photo:
    80
    Likes Received:
    2,006
    Member of:
    NRA, NA Hunt Club
    Hunted:
    Tanzania, Botswana, Zimbabwe (2), Namibia (2), South Africa (2)
    Flying Delta this year....
     

  7. enysse

    enysse AH Ambassador

    Joined:
    Jan 20, 2009
    Messages:
    10,351
    Video/Photo:
    102
    Likes Received:
    2,934
    Member of:
    Northeast Wisconsin SCI chapter, Lifetime member of NRA,RMEF
    Hunted:
    Namibia, South Africa (East Cape, Guateng and Limpopo)
    I can't complain SAA service was good, equal to Delta....
     

Share This Page