SAA set to dip into state pot
SAA could start dipping into the state's R5-billion loan guarantee by March if it does not repay a recent short-term loan from its operating income.
The state-owned airline made use of an emergency short-term loan of about R550-million to cover fuel costs for flights in the festive season and must repay it within three months, the Sunday Times reported yesterday.
SAA spokesman Tlali Tlali referred queries to the Department of Public Enterprises.
The department was instrumental in securing the R5-billion loan guarantee from the Treasury last year towards the end of a turbulent 12 months for the national carrier.
Half of SAA's board members resigned in September shortly after it emerged that the company's request for a R6-billion recapitalisation would not be granted. A few weeks later CEO Siza Mzimela, and two senior managers, also resigned.
SAA had an operating loss of R1.3-billion last year, bringing total losses in the past decade to R14.7-billion.
Two low-cost airlines serving the domestic market - Velvet Sky and 1time - folded last year citing high fuel costs.
But the state-owned company burned through R3.3-billion in cash in the past two years, mainly because of more expensive fuel.
Part of SAA's turnaround plan entails buying aircraft that will be more fuel-efficient.
Public Enterprises spokesman Mayihlome Tshwete would not go into detail about the loan to SAA during the festive season.
"SAA is a company in financial distress and the shareholder is involved in its turnaround strategy," he said.
The government is SAA's only shareholder and has given it financial support to the tune of R15-billion in a decade.
Public Enterprises Minister Malusi Gigaba said in October that SAA would have a turnaround strategy in place within two months and a new CEO within three.
Tshwete confirmed that the Treasury's guarantee has stringent conditions and that SAA has not taken a loan against it.
Other industry players have criticised SAA for using state backing to compete in the domestic market.
Erik Venter, CEO of low-cost airline and Mango competitor Comair, last year slated the government for continuous SAA bailouts, saying they were having a disastrous effect on competition.
He also requested more transparency in SAA's involvement with Mango.
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Posted 137 days agoThe airline should get management who know the business and trim the worthless fat off a massive staff.
Sasha*-Fierce
Posted 137 days agoThe integral part of SAA’s problem is lack of skills and academic intellectual capacity from top management because of ‘’cadre deployment’’! We have lot of guys in South Africa who can turn SAA around and make it the best airline we can ever dream of! But instead the ANC only hire ‘’failed’’ BEE self corrupt made executives who did not manage to keep their small BEE airlines afloat!
The main reason to hire them is to ensure the fact that they will have to switch tenders to companies which are aligned to the President and the Minister for self enrichment. As such, relevant employees who are having the necessary skills and academic intellect to lead SAA are being excluded because of their colour and none political involvement / affiliation!
In order to survive, SAA must stop none critical capital projects, there is a necessity for that company to squeeze cash from inventory so that a significant amount of cash cannot be tied up .On their yearly report it shows that the company mismanaged to maximise collection rates and have dismally failed to reduce unnecessary labour especially at senior managerial level, most importantly, why do salaries of executives going always higher, that is a sign of cadre deployment and greed hence the word, ‘’our time to eat’’!
Because of dodgy small tenders like catering and acquiring office stationery and office cleaning materials, SAA failed to lower the monthly payments of term-debt obligations. Refinancing the debt obligations can also help as that will free up cash for other uses.
One of the most grossly mistake that SAA is doing is to take their cash flow problems out on their customers which makes people to fly through British Airways.
But however the essence and cornerstone of all this problems is lack of ‘’the know how’’ in particularly black people to operate and run that kind of business and unfortunately comrades decide who should be deployed in order to gain tenders otherwise we will not have the above mentioned problems which are very easy for a person who have skills and academic intellect to know how to run the business.
nsukuange1
"As such, relevant employees who are having the necessary skills and academic intellect to lead SAA are being excluded because of their colour and none political involvement / affiliation! "
If I understand you correct madam, skills and academic intellect comes with color(White)? You are so living in 1948 madam, but I do not blame you at all, I blame your Parents.
CynthiaMulomba
Black-Moses
Thank you for the compliment, but there is absolutely nothing new under the sun, besides changes. Regarding, your gender, i trust my very complicated, and strong sixth sense, which is far stronger than the other five.
sibujwana
Sasha*-Fierce
After the Mangaung Conference, Gigaba became the number 8 powerful member of the ANC in terms of the votes as he is number after Nkosazana Zuma on the majority ladder! That means he is a top ''Chief'' and as such should be very careful when dealing with him.
He will not be shifted in terms of political loyalty but let us hope he chooses a new department as he is having that power or perhaps Zuma himself shift him!
shelatt
So try for once to display some intelligence and admit that the cadres put into SAA are the problem, the fact that they happen to be "not white" has no relevance in this discussion.
nkosipeter
Posted 137 days agonghunghunyane
Posted 137 days agoim sure the comp commission is full of deployed cadres, so they are looking after each other
i_stub_born
Posted 137 days agoKZN
Posted 136 days agoPolitical cronies [BLACK and WHITE] should stick to politics and let competent business persons attend to business.
jayceevan_rooyen
Posted 136 days agoRowanTorr
Why should the South African taxpayer support THREE National Carriers, is the question???
S A Express, Mango, SAA.
Whow!
shelatt
The Corruption party does not care a hoot for these people, and here is the proof. The salary bill for the two hundred odd (mostly corrupt) ministers et al runs into the hundreds of millions each year. They do not EARN this, they TAKE it for the least amount of work. How is it possible that Zuma (and his wives) earns more than Obama, the most powerful leader in the world....Come on you moronic Corruption supporters, make me understand why he deserves it. And what's the president of our country doing being a member or director of an untold number of companies and CC's. Does he not receive enough to stave off hunger and misery? It’s absolutely disgusting that he can take in all this money from the tax payers while the poor and indigent (who by the way helped him get voted in) suffer interminably. In fact to put it more succinctly , any politician who has ever indulged in the splurging of taxpayers’ money on self-indulgent pursuits is a disgusting lump of putrid faeces who should be stripped of everything they own and forced to live in a squatter shack for the rest of their lives. Wow, I’ve just realised the whole cabinet of Corruption will have to be moved to what would become the most well known squatter camp in the world....!!!
So you see dumb asses, by voting for these a-holes you are allowing the rape to continue. Having said this I realise there are certain people who have to vote for the Corrupt....those that are already entwined in the quagmire that has been formed over the last few years and who rely on the largesse bestowed on them for playing the money and power game of the untouchables! Are YOU one of those leeches sucking up to the top six????
Now one of the unintelligent arguments over “ who else to vote for...” can be solved right here...If you want to be guaranteed things like service delivery, a decent life for all, top class education among many others, all you need do is threaten the Corrupt with a loss of power. That’s all, just let their majority of parliamentary seats drop below 60% and watch the change happen instantly!!! Make them realise that power can be removed at the cross of a pen. At the next election arrange with groups of people you associate with to vote for various smaller parties like the ACDP etc so that not one party becomes too dominant. The worst thing you can do is not vote as that will not be as strong a message.
Another thought to ponder....What could be so wrong with giving another party just 4 years to prove itself? The Corruption party has taken nearly 20 years to fix poverty with negative results (more poor now than before 1994)and not forgetting losing 30 billion bucks per year to fraud and corruption!!
In just 4 years you can just as easily vote them out if you are not satisfied...simple! Realistically the only party who could make the changes you want is the DA, considering they have a fairly good track record in the Cape....I do also believe that most politicians lie and steal but as long as we have press freedom and involved citizens we can keep it in check.
Go on, give them 4 years, (not a lifetime) and let’s see what they can do!!!!