The National Assembly has passed The 2018 Special Appropriation Bill has been passed by the National Assembly that is meant to allow government to provide South African Airways with a bailout of R5 billion.
The airline told Parliament that it requires R21 billion if it is to survive. R9,2 billion of this amount will go towards covering maturing debts that are due by march 2019.
Most opposition parties opposed the appropriation bill citing that the airline has been bailed out numerous times and that government should instead consider selling it.
However, Deputy Finance Minister Mondli Gungubele says that while the airline still needs government support, it is on its way to profitability.
“In SAA as we speak all domestic routes except PE (Port Elizabeth) are profitable at gross profit margin level meaning that they’re able to cover aircraft leasing costs, pilot salaries , cabin crew salaries, fuel, food, navigation and lending costs. Now that the margins have returned, SAA is increasing frequencies in the domestic market. Joburg to EL (East London) and Joburg to CT (Cape Town) routes to claw back the market share.”
Click below to watch SAA’s CEO talk about the airline’s future.
Article sourced from SABC News
