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Richard Branson says he is open to buying stake in struggling SAA
Virgin Atlantic is not the only airline that might be interested in SAA, which has received another state bailout
08 November 2019 – 05:10 Lukanyo Mnyanda
Richard Branson, the founder of Virgin Atlantic who is hoping to fly tourists to space in 2020 through his latest venture, says his airline would be open to considering buying an equity stake in struggling SAA.
“I have great difficulty in life saying no,” the British billionaire said in an interview on Thursday. “I’m known as Dr Yes at Virgin, so if we were approached by the SA government, we’d definitely have a look.”8 Nov 2019
I thought the same but refrained from saying it. I cannot see why anyone would think SAA is worth investing in unless there is a complete shakeout of the corrupt and incompetent. That seems unlikely with a
The ANC in power.8 Nov 2019
He has made rather more money than have 1…..who knows ?
Seriously though any purchaser would need in my view at least 80-95% equity and purchase for US$1.00 to take it on and even then……….?9 Nov 2019
He has made rather more money than have 1…..who knows ?
Seriously though any purchaser would need in my view at least 80-95% equity and purchase for US$1.00 to take it on and even then……….?
Aside of the money I would be surprised if any serious buyer would be interested in the political interference that you would likely get from the people who “run” the country.
1 user thanked author for this post.9 Nov 2019
Unfortunately the cuts may affect people at the bottom, rather than the wasters at the top.
South African Airways (SAA) announced on Monday afternoon that has informed its 5 146 employees that it is embarking on a restructuring process which may lead to job losses.
The restructuring excludes SAA subsidiaries SAA Technical, Mango Airlines and Air Chefs.
The retrenchments could affect 944 of its employees, according to Acting CEO Zuks Ramasia – this is almost a fifth of its labour force.
Ramasia said in the statement the airline has commenced a consultation process with all employees in line with the Labour Relations Act. She said SAA has faced numerous challenges over the past few years, including, funding and liquidity challenges, the inability to borrow indefinitely without repaying debt and high interest costs on loans.
“Our continued losses and reliance on government guarantees to borrow money from lenders, have increased the interest costs which impacts the operating cost of the business,” said Ramasia.
Other challenges include a volatile and fluctuating fuel price, currency volatility, insufficient revenue and cash generation in relation to operating costs, an ageing fleet which is expensive to maintain and is fuel inefficient. Ramasia said this makes it difficult for SAA to compete in the market place.
Fin24 reported last week that SAA is apparently scrambling to obtain R2bn before November 20, according to a source.Asked about the alleged rush, SAA spokesperson Tlali Tlali told Fin24 at the time that the R2bn was “always part of our requirements for working capital so this is not new”. He said SAA is in the process of “procuring that required amount”.
Over the past 13 years, the flag carrier has incurred over R28bn in cumulative losses. In the medium-term budget policy statement, Finance Minister Tito Mboweni announced that the state would pay off SAA’s government-guaranteed debt of R9.2bn “over the next three years” to honour the airline’s contractual obligations.
Dr Azar Jammine, director and chief economist of Econometrix, said that while he did not have specific knowledge about the R2bn, this is the kind of thing that has been happening at SAA over the past few years. The airline, he said, is given lines of credit which then expire and has to borrow money anew.
“The commercial banks have been getting a bit sticky about lending money to SAA without the necessary (state) guarantees because of the huge losses the airline made,” Jammine told Fin24. He explained that the provision of such a guarantee by the government, should a bank require it to give SAA a loan, is different to a “bailout” where government would simply give SAA the money.
Jammine said it could be that a lot of short-term SAA loans might be expiring, leading to an inevitable scramble to deal with it by lending more money.12 Nov 2019
The forthcoming strike could signal the end of SAA as we know it.
my uneducated guess is that the strike will be called off at the last minute. If it goes ahead it will be very bad news for a lot of people including the strikers.13 Nov 2019
Ferial Haffajee: Why should SAA employees pay for the sins of Dudu Myeni and Jacob Zuma?14 Nov 2019
SAA has made a new offer to unions in a bid to avert a looming strike at the national flag carrier.
Phakamile Hlubi-Majola, the spokesperson for the National Union of Metalworkers of South Africa, said on Thursday morning that the new offer would be put to union members at a meeting set to start at 14:00.14 Nov 2019
Given the instability and threats of strike at SAA, I’d love the advice of folks who know the market better than myself for some upcoming flights I have booked over the upcoming holidays. While I have a SAA J flight from JNB to CPT on 17 Dec, I’m most concerned about the SA Airlink flights I have from CPT-MUB (23 Dec) and MUB-JNB (28 Dec). I realize Airlink is not part of the threatened strike action, but concerned that might change. Would anyone recommend I cancel the SAA/Airlink flights and move to a mix of Comair and Air Botswana – even if it means my flight from CPT to MUB is no longer non-stop? As you might imagine, my biggest priority is to make sure I arrive and depart from Maun on the days planned. I have experience flying SAA, Airlink, Comair and Air Botswana – have no bias against any of them.14 Nov 2019
Just reported by Aviation24.be that SAA is making cancellations for 15 and 16 November.14 Nov 2019
After a meeting on Thursday afternoon, the National Union of Metalworkers of South Africa and the South African Cabin Crew Association rejected the latest offer by South African Airways.
This means that, for now, the strike called by the two unions and their 3 000 members at SAA and SAA Technical will go ahead on Friday morning at 4am.
Only flights operated by South African Airways will be affected, the airline said earlier in the day. All flights operated on partner airlines, including SA Express, Mango, SA Airlink and all codeshare partners, including flights operated by its Star Alliance partner airlines, will not be affected.
In a joint statement the two unions said the strike would be indefinite.14 Nov 2019
Would anyone recommend I cancel the SAA/Airlink flights and move to a mix of Comair and Air Botswana – even if it means my flight from CPT to MUB is no longer non-stop?
Yes, without any hesitation. Airlink and SA Express have the habit of cancelling flights at the last moment. Kulula are IMO the most reliable.14 Nov 2019