Gordhan says SAA in ‘intense discussions’ with lenders, calls on public to buy tickets | Fin24
 
  • Glencore

    The world’s biggest commodities trader is being investigated for bribery by UK authorities.

  • South African Airways

    Trade union Solidarity wants the airline's ex-chief Vuyani Jarana on board for business rescue.

  • Ferial Haffajee

    Why Minister of Public Enterprises Pravin Gordhan’s patriotism call to fly SAA flopped.

Loading...

Gordhan says SAA in ‘intense discussions’ with lenders, calls on public to buy tickets

Dec 02 2019 06:19
Jan Cronje

Minister of Public Enterprises Pravin Gordhan has said that cash-strapped airline SAA is in intense discussions with lenders to secure much-needed funding and will go through a "radical restructuring process" to ensure its financial and operational sustainability.

Gordhan, in a statement on Sunday afternoon, said a weeklong strike by members of National Union of Metalworkers of SA and the SA Cabin Crew Association had "caused immense damage to the reputation, operations, and the deterioration of the finances of SAA".

The strike, which cost the airline an estimated R50m per day, ended on November 22.

The finance minister's latest statement comes after Flight Centre on Thursday said it would stop selling SAA tickets until "certainty" returned to the market.

Both Santam and Hollard insurance have withdrawn insolvency cover benefit on SAA tickets.

Support the airline

Gordhan on Sunday said it was the "collective responsibility as South Africans to support SAA in its efforts to restore sales confidence among its customer base and rebuild revenues in the shortest possible time".

"We therefore reassure customers and encourage them to buy tickets with confidence. 

"SAA is determined to remain open for business. Management is also committed to ensure financial sustainability going forward."

SAA's board and management would intensify marketing campaigns to rebuild confidence, said Gordhan. He added that the airline's leadership would be taking "bold initiatives to increase its market share," without providing further details.

Gordhan did not say which lenders the flag carrier is in discussions with. In mid-November the minister said that while the government as committed to saving SAA, there was no room for further bailouts.

"Even if there were funds available, there is no legal mechanism to provide funding to SAA in the current year," he said after meeting with striking workers on November 19.

Finance Minister Tito Mboweni, meanwhile, presenting his mid-term budget in late October, announced that the state would no longer be bailing out state-owned enterprises, but would be open to providing loans that had to be paid back with interest.

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...