South African Airways is moving closer to an agreement with lenders to extend R9.2 billion rand ($642 million) of debt, a deal that would buy the unprofitable state airline more time to restore its battered finances.<\/p>\n
An agreement has been reached \u201cin principle\u201d to roll over the borrowings, \u201cbut of course there are certain conditions that need to come through,\u201d CEO Vuyani Jarana said at the CAPA aviation conference in Dubai on Tuesday. \u201cIt\u2019s an ongoing conversation.\u201d<\/p>\n
An agreement with lenders would ease SAA\u2019s dependence on the National Treasury, which allocated R5 billion to the carrier last year to help it meet debt payments.<\/p>\n
Finance Minister Tito Mboweni has made clear the government is reluctant to approve a further outlay, saying in November he favours shutting down the company. Eskom Holdings SOC Ltd, another state entity, was in February granted a record R69 billion bailout to be paid over three years.<\/p>\n
Jarana was hired in late 2017 to lead a turnaround of SAA after years of mismanagement and corruption scandals.<\/p>\n
One of his plans is to transfer four unwanted Boeing SA aircraft from the main airline to low-cost carrier Mango, which has the scope to increase capacity, he said.<\/p>\n
\u201cThere\u2019s more growth in the low-cost services in the domestic market, which makes Mango very critical for SAA,\u201d he said.<\/p>\n
SAA is also looking to hire an adviser to help sell the state-owned airline\u2019s catering business, Jarana said, a move that would raise capital and rid the carrier of less important assets.<\/p>\n