South Africa mulls integrating airlines

Victoria
By Victoria April 25, 2013 13:23

South Africa mulls integrating airlines

The South African Public Enterprises Minister Malusi Gigaba is considering integrating South African Airways (SAA) with its low-cost subsidiary Mango and regional carrier South African Express to meet funding requirements.
According to the Department of Public Enterprises, the integration of SAA is central to the airline’s turnaround strategy drafted to meet Treasury requirements for funding, which is also a condition of the R5bn guarantee Treasury extended to SAA last year, which allowed the loss-making airline to continue to trade as a “going concern”.
One the two-year R5bn guarantee expires, regional carrier SA Express is likely to need financial support. Although its accounts are not public, analysts estimate that SA Express had made a cumulative loss of R265m for the previous two reporting periods.
By collapsing the assets of the airlines into a single holding company, there will be no need to make two separate calls to Parliament to bailout the companies.

Victoria
By Victoria April 25, 2013 13:23
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