South African Airways (SAA) is on the verge of bankruptcy and may not be able to pay salaries. A cash-flow statement prepared for the South African government, suggests the struggling carrier is requesting a £44.9m bailout.
Even if the money is funnelled in, the statement suggests the funding would only delay the inevitable until December, as it forecasts a cash outflow in that month of £38m.
SAA has reported losses in each of the past seven financial years.
The South African Treasury paid out £125m earlier this year to settle a loan from Standard Chartered bank which the bank had refused to extend. Malusi Gigaba, South Africa’s Finance Minister, disclosed that SAA asked the Treasury in March for a £560m recapitalisation. The government is expected to rule on the matter by October.
Alf Lees, deputy finance spokesman of the opposition Democratic Alliance, told the BBC the airline is technically insolvent and should have filed for liquidation.
“We believe that the directors are in breach of the South Africa companies act by continuing to trade recklessly knowing that SAA will not be able to meet its financial commitments and without any guarantee that the shareholder (the South African government) will be prepared to continue to bail them out.”
SAA is also under pressure from labour unions. The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) are planning a protest march on Friday (4 August) to SAA’s Johannesburg headquarters.
