{"id":286236,"date":"2018-11-22T10:46:48","date_gmt":"2018-11-22T08:46:48","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=286236"},"modified":"2018-11-22T10:46:48","modified_gmt":"2018-11-22T08:46:48","slug":"saa-says-it-will-be-profitable-by-2021-heres-how-much-money-it-says-it-needs-first","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/286236\/saa-says-it-will-be-profitable-by-2021-heres-how-much-money-it-says-it-needs-first\/","title":{"rendered":"SAA says it will be profitable by 2021 – here’s how much money it says it needs first"},"content":{"rendered":"

The Department of Public Enterprises (DPE) has reiterated that it is considering the introduction of a strategic equity partner to assist the ailing\u00a0South African Airways (SAA).<\/p>\n

In a parliamentary meeting<\/a><\/strong> held on Wednesday (21 November), department officials said that despite previous bail-outs for SAA – including the R5 billion under consideration – the airline will still be insolvent and that the DPE needs to find other ways of improving SAA\u2019s balance sheet.<\/p>\n

SAA told the parliamentary committee that forecasts estimate that the airline will 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.<\/p>\n

SAA officials said that the new management understands what is needed to turn the airline around, in terms of capacity, funding and decision-making.<\/p>\n

“A lack of action and commitment will undermine the turn-around plan, however, the current management team is taking difficult decisions, which was not the case previously,” it said.<\/p>\n

Bailout already spent\u00a0<\/strong><\/p>\n

In an\u00a0interview<\/a><\/strong>\u00a0with SA Flyer Magazine at the beginning of November,\u00a0South African Airways CEO Vuyani Jarana said that the airline can be saved, and it is on track and on budget for its turnaround strategy \u2013 all he needs is time.<\/p>\n

According to Jarana, the airline needs R12.5 billion in shareholder funding to break even and turn to profit. R5 billion of that has come from the recent mid-term budget in October.<\/p>\n

\u201cThe MTBPS stated that the funds would help to prevent a call on the airline\u2019s outstanding debt of R16.4 billion of the total of R19.1 billion guaranteed by government,\u201d Jarana said.<\/p>\n

However, with SAA expecting losses exceeding R5 billion for 2018, much of the bailout is already spent.<\/p>\n

\u201cR3 billion of the R5 billion has gone into paying arrears,\u201d Jarana said.<\/p>\n

\u201cWe have the R2 billion and have been working within that limit, helped by better cash flow management, including the fact that Angola started paying us the funds it had blocked.\u201d<\/p>\n

\n

Read:\u00a0R3 billion of SAA\u2019s R5 billion bailout already spent: CEO<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Despite previous bail-outs for SAA – including the R5 billion under consideration – the airline will still be insolvent, say officials.<\/p>\n","protected":false},"author":10,"featured_media":137355,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[26,1675],"class_list":["post-286236","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-headline","tag-saa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/286236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=286236"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/286236\/revisions"}],"predecessor-version":[{"id":286254,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/286236\/revisions\/286254"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/137355"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=286236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=286236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=286236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}