The embattled South African Airways has no chance of being rescued from its current liquidity and mismanagement problems, the country’s main opposition party said on Thursday.
The Democratic Alliance (DA) said it did not believe the SAA could be rescued and that the newly appointed business rescue practitioners mandated to save the airline should instead apply for its liquidation.
The SAA received a lifeline from the Development Bank of Southern Africa (DBSA) which committed US$233 million in emergency funding to the national carrier in efforts to get it to fly again after a two-week flights cancellation.
The state-owned bank also pledged to give SAA an additional US$133 million in the form of a delayed “draw down” loan which stipulates that the airline could withdraw pre-defined amounts of funds in the future.
Following the loan, DA lawmaker Alf Lees said he had written to Trade and industry Minister Ebrahim Patel regarding the details of this week’s bank deal from the DBSA to advise against the funding.
Lees said he noted that since December last year to date, the state-owned airline had lost $133 million and was therefore running at a loss.
“Instead, they should be applying to court for a liquidation,” he said, adding: “There’s an obligation on the business rescue practitioners to be completely honest and open about this and accept that the airline cannot be rescued.
“The airline is more than just financially dead. Its clients have abandoned it.”
The government, which views the SAA as a national asset and source of pride, has in the past rejected the opposition’s demands to privatise the award winning flag carrier and risk the loss of 10,000 jobs.
NM/jn/APA