SAA and SA Express will receive R5bn and R1,2bn in additional funding, newly appointed Finance Minister Tito Mboweni said in his medium-term budget policy statement on Wednesday, October 24.
“To support a sustainable reconfiguration of our airline portfolio‚ in 2018/19 government will provide additional funding for SAA and South African Express Airways,” the Finance Minister said. “Minister [Pravin] Gordhan and I are working closely to limit the fiscal cost of these measures. By the end of the year‚ the boards of these two companies will present plans to strengthen and align their operations.”
Business Day also quotes the Minister as saying: “We should be open-minded about the involvement of equity partners and open to the idea of closing some business activities.” He was commenting on the need to reconfigure state-owned entities in a press briefing after the policy statement.
SAA incurred a nett loss of R5,5billion for the 2016/17 financial year. While it hasn’t reported its financial results for the 2017/18, the carrier expects similar losses.
However, the airline said last month that it was on track with its turnaround strategy and would reach breakeven by 2021.