South African Airways to restructure under 'business rescue'
South African Airways, the country's beleaguered flag carrier, has entered into a new phase of government rescue.
The airline has received a new government-backed cash infusion of 2 billion rand (about $137 million) from its existing lenders, the latest in a series of government bailouts the struggling company has received in recent years.
The South African treasury matched that loan as part of the government's business rescue plan for the airline.
Pravin Gordhan, South Africa's public enterprises minister, announced the plan in a statement Friday.
"Our desire is that the restructured airline will mark the beginning of a new era in South African aviation," the statement read in part. "It is also important that the reliance on government finances be reduced as soon as possible to minimize disruption to SAA services, customers, staff and other stakeholders."
Under the plan, a "business rescue practitioner" will take control of the airline and help restructure the company, attempting to stabilize its operations and finances. South African expects to continue flying normally as it restructures.
"This set of actions should provide confidence to customers of SAA to continue to use the airline because there will not be any unplanned stoppages of flights or cancellation of flights without proper notice should that be necessary," Gordhan's statement said.
According to Gordhan's, the company will try to retain as many jobs as possible as the business is reconfigured.
Despite the airline's financial difficulties, the carrier seems confident in its financial position and has planned to add up to four Airbus A350s to its fleet. Some are already flying on long-haul routes, including to the U.S. The planes represent a significant upgrade to the airline's onboard product over the old A340s they are replacing.
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