Finance Minister Tito Mboweni has expressed his dissatisfaction with the national carrier South African Airways(SAA).
On Thursday the minister said that South African Airways should be disbanded or closed down.
“It has made numerous loses and is unlikely to sort out the situation, so my view would be close it down,” Mboweni told investor conference in New York.
Towards the end of October, Mboweni said that he doubted that the government would find an investor to take an equity stake in struggling state-run airline, due to its current financial state.
“I doubt you are going to find an equity partner who will come into SAA in this current state. As an equity partner you’d have to immediately assume the debt of some R21 billion,” Mboweni told lawmakers, a day after giving a bleak medium-term budget speech (MTBPS).
At the MTBPS, SAA received another R5 billion cash injection to prevent the recall of its R16.4bn debt by March next year.
The National Treasury said the government also agreed to allocate SA Express R1.2bn.
“SAA has an R19.1bn government guarantee, R14.5bn of which has been used. Debt of R14.2bn is maturing in or before March 2019. In 2018/19 government is allocating R5bn to help the airline repay this debt,” Treasury said.
SAA is not making enough money to clear its total debt and will have to negotiate with lenders or extend maturity dates.
Finance Minister Tito Mboweni yesterday said that the government was planning to restructure the country’s state-owned enterprises (SOEs) to address their liquidity problems.
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