South African Airways denied more funding, considers options

Crippled South African Airways has had its request for R10 billion from the government denied. The carrier, which entered voluntary business rescue back in December 2019, has only managed to secure R2 billion from the R4 billion it was offered from the government previously to overcome short-term liquidity issues until 31 January.

A South African Airways Airbus A340. Photo by Jay Lee │ AeroNewsX

The new request, which was made on 2 April to aid the business rescue process, was denied by the Department of Public Enterprises. The Business Rescue Practitioners involved in the rescue process for South African Airways, say they are now considering their options following the new move from the government.

Furthermore, the practitioners had requested an extension to its foreign currency borrowing limit - a request which was also denied. Over the course of the last six years, South African Airways' debts have amounted to nearly R26 billion ($1.4 billion).

While the Department of Public Enterprises have continued interest in keeping South African Airways alive, therefore securing jobs and national and international connectivity, the coronavirus crisis has drained its funds. Therefore, South African Airways is no longer a top priority when it comes to finances. Unfortunately, many believe that the only option South African Airways have now, is liquidation.

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