SAA has hastened to distance itself from suggestions that the government is supporting the airline, after the announcement in the budget speech by Finance Minister, Enoch Godongwana, that SAA is to receive R1 billion from Treasury.
The airline sent out a media communiqué stressing that the allocation is part of the government’s original commitment to the business rescue process (which SAA exited in April 2021), and will be used to cover outstanding liabilities, specifically those relating to the final dividend payment to creditors and the refund of legacy unflown tickets to affected passengers. These debts date back to the period when SAA was placed in business rescue in December 2019.
A report in Travel News on June 11, 2021 (as the Takatso Consortium was announced as the new Strategic Equity Partner (SEP) to buy out 51% of the airline from the DPE), substantiates this read here. Minister of Public Enterprises Pravin Gordhan said at the time, that the deal would “draw a line in the sand between the old and the new”.
“While Government will continue to take responsibility for the debts of the old SAA, the new SAA will not have any further reliance on the fiscus,” said Gordhan, in June 2021.
SAA’s Chief Financial Officer, Fikile Mhlontlo, said in the latest media release: “SAA has reached a point where we cover our operating costs. It must be emphasised that the allocation announced relates only to historical debt. These funds are not meant to bolster the business plan we are currently executing.
“The R1bn allocation is part of original R 3,5bn that was needed for SAA to settle all debt that the Business Rescue practitioners had ring-fenced into a Receivership. Due to the financial performance of SAA and the innovations of its management team, the total balance expected from National Treasury has been reduced to R2,586bn. The airline will continue to negotiate with National Treasury for the balance of the funds and co-operate with all the conditions that may accompany the flow of these funds,” said the airline in its release.
