SA government receives proposals from private sector for forming a new airline

June 24, 2020: South Africa’s department of public enterprises has received an expression of interest in a new and restructured South African Airways (SAA).

The department said that the airline, which is currently in business rescue proceedings, has received unsolicited proposals from private sector funders, private equity investors, and potential airline partners for a new national airline that must emerge from the business rescue process,

“Government is intent in pursuing credible proposals for investment and strategic partnerships with the private sector, as well as equity participation for employees. Such partners will also introduce technical, financial and operational expertise,” the department stated.

It added that due to the ongoing coronavirus pandemic there are possibilities for áirline partnerships’ to improve scale and scope and ensure the long-term sustainability of the local aviation industry.

SAA was put into business rescue on December 6, 2019.

In a rescue plan published on June 16, the BRPs proposed government put up at least R26.7 billion to rescue the carrier.

Responding to the plan, the Department of Public Enterprises said that the aviation industry in South Africa requires the capabilities of an SAA that is ‘reconstituted, restructured and reinvigorated’, without the legacy burdens, including corruption, poor leadership and unsustainable costs, which have beset the airline’s past.

However, in a dramatic turn of events, one of SAA’s creditors, regional airline Airlink, supported by several unions, has since filed a court application to prevent the rescue package from being discussed. The government has said it would resist any such injunction.