South Africa’s troubled national carrier is planning to sell nine of its Airbus aircraft, Reuters reported on Thursday, citing a tender document seeking proposals from interested buyers.
The airline, which was placed under a rescue plan by the government last month, has put up for sale the Airbus A340-300s and A340-600s as well as 15 spare engines, the document said. The decision to sell some of the carrier’s assets comes even as the government struggles to get extra funding to rescue the national airline and the jobs of around 10,000 people.
Under the rescue plan, South African Airways (SAA) was to receive up to 4 billion rand ($274 million) in funding – two billion rand from the government and another two billion rand from lenders. While the lenders have paid their own share, the Treasury is yet to set up a mechanism for providing its portion of the rescue package, reports say.
The Treasury had provided “financial support to the best of our abilities,” Tito Mboweni, the country’s finance minister, was quoted as saying in Johannesburg. “As of yesterday when I was speaking to the director-general of National Treasury we were still trying to find additional financing for SAA. … Let’s keep our fingers crossed.”
SAA, which last made a profit in 2011, has been heavily reliant on state bailouts for survival and funding of its operations – it has received 57 billion rand in bailouts over the past two decades.
Already struggling to settle its debts, the airline’s finances took a huge blow after the National Treasury refused to provide it with more funding. And without the needed cash, the government may be unable to prevent SAA from going bankrupt.
But business rescue experts this week expressed optimism that a mechanism can be found to unlock the liquidity constraints and ultimately save SAA. But the airline may have to suspend some flights and delay salary payments if the government does not pay up very soon, a trade union official was quoted as saying by Reuters.
The South African carrier is just one of several state-run enterprises struggling with debt, a result of mismanagement which lasted for almost a decade. Another is the state energy company Eskom, whose chairman resigned last week after power cuts as it struggles to keep the lights on.