Development Bank of Southern Africa, the state-controlled bank of South Africa, has averted the impending ruin of South African Airways (SAA) by pumping in R3.5 billion ($240 million) as a bailout package into the beleaguered state-owned airline.
According to a statement from the South African Airways business rescue team, it said that in order to still keep the airline operational, it would be instantly utilising R2 billion out of the overall funds provided by the bank.
The South African Airways had withdrawn many of its flights earlier this month in a bid to conserve its finances.
This move came close on the heels of the government’s inability to fulfil a commitment made on infusing cash with respect to the terms of its liquidation process.
Since 2011, the state-owned airline has not been able to generate any revenues and has managed to survive largely due to government rescue packages and loans granted through assurances made by the state.
A panel of business protection specialists has been formed in an endeavour to save the stressed airline operator.
But, owing to the airline’s obnoxious habit of constantly begging the authorities for finances, many politicians in the capital Pretoria have lost their patience with SAA.
Based on the panel drafted to protect the state-owned airline, the objective is to design a revamp plan that features an external partner without compromising on union jobs.
A collaboration formed with any of the Gulf airline operators can facilitate a great deal in mitigating the woes of SAA, as signing a codeshare treaty would enable the besieged airline to get connected globally.