South African Department of Public Enterprise (DPE) has announced that it has received unsolicited proposals from the private sector funder, private equity investors and private airline partners for a new airline that must emerge from the South African Airways (SAA) Business Rescue process.
South African Airways has been operating on losses for more than a decade and was in December 2019 placed on Business Rescue. The airline has been surviving on bailouts from the government in the recent history.
The DPE said in their statement: “Government is intent on perusing credible proposals for investment and strategic partnership with the private sector, as well as equity participation for employees. Such partners will also introduce technical, financial and operational expertise.”
The DPE did not disclose the organisations that have expressed interest in the new airline. In recent past Ethiopian Airlines has been listed as an interest party. One imagines that one of the Middle East three airlines will be interested in acquiring a stake in South African Airways. The South African government has committed to fundamentally restructure and transform SAA into a viable, sustainable and competitive national carrier.
All signs now point to a new and leaner SAA. The Business Rescue Practitioner in the published plan proposed cutting the labour force to 1000 employees operating 19 aircraft until November 2020.
In the statement the DPE said: “Government is committed to the formation of such a new airline with no legacy of financial and operational issues which will be managed by competent, competitive and skilled personnel who have strategic and technical capabilities which are critical to the success of the new carrier.”
Desired characteristics for the new airline include:
- Modern Fleet
- Effective route network
- Motivated workforce
- Customer centric
- Appointment of qualified Board of Directors.
#SAA #BAILOUT #JustAfricanAviation
Copyright 2020 Just African Aviation Pty Ltd, Permission to use quotations from this article is granted subject to appropriate credit being given to www.justafricanaviation.com as the source.