SAA needs R7.5 billion to fund further operations
In a presentation, SAA suggested a turnaround plan and funding for the next month into 2019.
A turnaround plan for SAA was presented to a parliamentary committee on Tuesday this week. Some of its features included cutting jobs and routes in effort to turn a profit by 2021 and convince lenders to restore credit lines.
SAA last generated profit in 2011, with the state subsequently propping up the carrier.
SAA, which has not generated a profit since 2011, survives on state guarantees and is regularly cited by credit ratings agencies as a drain on the government purse.
The turnaround plan presentation showed that additional commitments from government would be able to fill the R3.5 billion liquidity hole from December, which lenders have refused to lend the company. SAA will also need an additional R4 billion from March 2019.
Interim CFO Deon Fredericks said:
“Currently we don’t have an optimal capital structure and as a result of that we are dependent on debt which is not good... the banks are pushing now for much more better support from the shareholder to put in place for us.”
SAA expects the turnaround plan to swing the company into profit in 2021 after a R5.2 billion loss in 2019 and another R1.9 billion in 2020.