South African Airways CEO, Vuyani Jarana, has told City Press that the airline needs further support from the government in order to survive, following a R5 billion bailout through an Appropriation Bill.
“This is not our asset. It is a state asset and we are just the stewards trying to make it work for the state,” Jarana told the paper in an interview.
“To the extent that we are seen to be good stewards, we need the government’s backing and support.”
SAA said that it aims to be profitable by 2021 and will incur financial loses of R5.2 billion and R1.9 billion for the 2018/19 and 2019/20 financial years, respectively.
According to the Free Market Foundation, SAA has swallowed up over R57 billion in taxpayer’s money over the past 20 years.
The Department of Public Enterprises is considering the possibility of introducing a strategic equity partner for the airline, according to the Parliamentary Communication Services.
However, Jarana said SAA is not ready for this as it would first need to restructure its portfolio to meet the demands of the market.
He added that a strategic equity partner would bring about certainty for the airline’s future.
Officials from the department told the Standing and Select Committees on Appropriations last month, that despite previous bail-outs for SAA, including the R5 billion under consideration, the airline will still be insolvent.
Jarana said he was confident about the turnaround plan for SAA, but is worried about the limited timeline the enterprise has for potential recovery.
“What keeps me awake at night is not whether we are going to make it work, but rather the pace we need to make it work.”