Face it, SA Airways is beyond rescue
Another day, another proposed bailout for South African Airways (SAA). It was yesterday revealed, according to a rescue plan compiled by administrators and backed by government and labour groups, more than R10 billion needs to be raised to revive the embattled airline.
Business rescue practitioner Siviwe Dongwana told a creditors meeting the communication from government gives a “very clear Cabinet commitment” to provide the needed money. While the absence of the urgent funding puts SAA in line for liquidation once again, the department of public enterprises has confirmed that government will reprioritise funds to finalise the restructuring of SAA. They stressed the national carrier would not be liquidated.
The unions may be hellbent against liquidating the airline, but the Democratic Alliance got it right when it said: “If President Cyril Ramaphosa’s government is serious about structural economic reform, the liquidation and closure of bankrupt entities such as SAA is a good place to start.”
It added: “It has become clear by now that no one is coming to rescue the bankrupt SAA.”
SAA has been in business rescue since December. When is enough? And if government does bail out SAA again, where will the money come from?