UPDATE 1-South African government won't give SAA more funds – rescue team

(Adds quotes, detail, context)

JOHANNESBURG, April 14 (Reuters) – The South African government told specialists appointed to try to save South African Airways (SAA) that it was not able to give additional funds for rescue efforts, the specialists said on Tuesday.

State-owned SAA entered a form of bankruptcy protection in December and is fighting for its survival after suspending a large number of domestic and international flights over the global coronavirus pandemic.

SAA’s business rescue team said in a letter to affected parties on Tuesday: “On 14 April 2020, the business rescue practitioners received a response from government … that government is unable to provide additional funding to sustain the business rescue process.”

“Neither will lending guarantees be provided in respect of the business rescue process,” the letter from rescue experts Les Matuson and Siviwe Dongwana added, saying they were still assessing the impact of the development on the business rescue process.

SAA airline, which has not turned a profit since 2011, has been a consistent drain on public resources in a country with huge poverty and unemployment.

It has received more than 20 billion rand ($1.1 billion) in bailouts in the past three years.

The public enterprises ministry said in a statement it was still exploring options for SAA.

A copy of Finance Minister Tito Mboweni’s speaking notes, circulated by the National Treasury during a briefing earlier on Tuesday, said part of the government’s fiscal response to the COVID-19 crisis included closing SAA.

Mboweni declined to elaborate when questioned by reporters.

SAA’s rescue practitioners have been consulting trade unions for weeks on potential job cuts.

Last month they warned that without drastic measures the airline’s “situation will deteriorate to such an extent that it will threaten the very likelihood of the company being rescued.” ($1 = 18.3902 rand) (Reporting by Alexander Winning Editing by Tim Cocks)

Source: Read Full Article