Financial Bailout Delays at SAA Choke Tourism and Regional Trade

SAA stock images

Johannesburg – Decades of mismanagement and delays in injecting fresh capital to South African Airways (SAA) threaten to obstruct regional trade, ENN reports.  The cash-strapped airline is pressing treasury for the urgent release of a two billion rand financial bailout for the loss making airline to continue flying. This comes at a time the airline has cancelled 28 domestic and 10 international flights in January alone to conserve cash. SAA spokesperson Tlali Tlali has warned that further flight cuts will follow if no interventions are done by the National Treasury.

High operating costs, mismanagement and inefficiencies at SAA over the last decade have drained money from SAA. It is embarrassing for one of Africa’s largest airlines to be reliant on government bailouts to survive. It would be interesting to see how the recently appointed business rescue practitioners at SAA look set to turnaround the airline at next month’s creditors’ meeting.

SAA provides a reliable air link between SADC nations and the world. With incessant disruptions and abrupt cancellations of flights, SAA is bringing uncertainty to regional and international travellers, making its financial problems a major business risk for Africa’s tourism and travel sector. Finance Minister Tito Mboweni has a huge task to avail the urgently needed two billion rand which was not provided for in the budget.