The South African government is set to bail out struggling national carrier, South African Airline, with an additional 5 billion rand ($400 million) capital injection as a result of its urgent financial troubles. The airline has not recorded profit since 2011.
The SAA Chief Executive had initially called out to the parliament regarding their urgent need for cash, as he expressed his concerns about job preservation. he also raised the greater concern of finding alternative jobs for people as well as the crises that might come with retrenchment.
The capital injection from the government will be used to repay creditors, suppliers and the rest will be used as working capital according to Jarana who was interviewed by Reuters.
According to Treasury, due process will be followed by seeing cabinet’s approval and the outcome of the process should be concluded before the 2018 Medium Term Budget Policy Statement which is usually presented to parliament in October.
The government believed South African Airways collaborating with an equity partner with the aim of investing monetarily will help address its liquidity crisis and help with implementing a different plan.
Rationalisation of the workforce seems like an unavoidable step that must be taken Jarana said and hopes the company breaks even in three years.
Image Credit:the south african
