Reuters reports that a presentation to the parliamentary by South African Airways shows that the cash-strapped airline will need a total of 7.5 billion rand ($540 million) from next month to fund day-to-day operations into 2019.
South African Airways (SAA), which is regularly described by credit ratings agencies as a drain on the government purse, has not generated profit since 2011 and survives on state guarantees. To buy support from lenders, the airline shared a turnaround plan that includes cutting jobs and routes in an effort to turn a profit by 2021.
The airline noted that lenders have refused to provide the company 3.5 billion rand to plug a liquidity hole from December unless they received additional commitments from the government. The presentation by the airline also showed the national carrier will need 4 billion rand ($288 million) from March 2019.
SAA’s interim chief financial officer, 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”.
The presentation showed that SAA is expected to make a 5.2 billion rand loss in the 2019 financial year and another 1.9 billion in 2020 before swinging into profit a year later.