JOHANNESBURG/CAPE TOWN - South Africa’s government will cede control of the national airline to a restructuring specialist in a last-ditch attempt to save the cash-strapped business from collapse.
The airline has been on the brink of collapse since a crippling strike last month left it without enough money to pay salaries on time. Then two major travel insurers stopped covering its tickets against the risk of the company becoming insolvent. “I think SAA is doomed already ... We shouldn’t be paying out of our own money. That money should be coming from somewhere else,” said Alicia Knoetze, 34, travelling to Zimbabwe.Public Enterprises Minister Pravin Gordhan said the business rescue process was the best way to rebuild SAA into a stronger entity. He said the plan was to attract an equity partner later.
The restructuring expert will aim to either return the airline to solvency or maximise value for its creditors. Banks have promised to give SAA 2 billion rand of loans guaranteed by the government to launch the process, with the government providing a further 2 billion rand in what Gordhan termed a “fiscally neutral manner”.
So once again the average Joe (& Jane) will be subsidizing via their taxes another failed and looted state run enterprise. The answer in South Africa is always, let's give them more money, to abuse...
‘Set to soar’ is a premature overstatement.
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