Cash-strapped South African Airways (SAA) is breathing a huge sigh of relief on Wednesday following a US$233 million emergency funding from the Development Bank of Southern Africa (DBSA) to get the grounded airline back into the air.
As soon as the SAA learnt of the DBSA’s financial loan from the state-owned bank, it wasted no time to alert its passengers, travel agencies and airline partners to book flights on the airline which is expected to return to the air within 24 hours.
The airline said the funding would also give stakeholders of the airline and partners comfort that the rescue process was on a significantly sounder footing.
According to SAA chief commercial officer Philip Saunders, the DBSA has also committed to make an additional $133 million available to the flag carrier as a “draw down loan” — a facility which enables the borrower to take out further loan advances.
The state-owned airline, one of the best in the world in spite of its financial woes, has not made a profit since 2011 – surviving on more than US$1.33 billion in bailouts over the last three years, records show.
Apart from the bank loan, Saunders said, the national carrier was still waiting for the promised US$133 million of emergency funding promise to it by government when the company entered into bankruptcy protection.
SAA grounded its flights two weeks ago following a serious cash squeeze, and government had since then been trying to solve the airline’s liquidity problems by holding talks with various stakeholders for possible funding.
Despite advice to privatise the company, the government of President Cyril Ramaphosa stands firm against the move, saying the SAA is a national asset and source of pride for South Africans.
NM/jn/APA