R6?billion to finance SAA growth plan

2012-02-15 00:00

CAPE TOWN — South African Airways (SAA) needs R6 billion to finance its growth plans.

This figure was mentioned when the airline appeared before the parliamentary portfolio committee for public enterprises yesterday.

SAA chief financial officer Wolf Meyer said the airline is developing its growth strategy, but if it is to implement a growth plan it will definitely need more money.

SAA chairperson Cheryl Carolus said there was a difference between money needed because of mismanagement leading to wastage and a situation where a company needed assistance in order to grow.

“SAA is growing and we are merely in discussions with our shareholder and the treasury about our growth plans, so that there are no surprises.”

Carolus said SAA had been able to grow over the past few years with new routes in Africa and to China without any additional aircraft or more money from government.

“But we are now getting to a point, like Transnet with its capital expansion, where we are growing to such an extent that we may need more resources.”

The airline provisionally has two guarantees from government, a R1,3 billion government guarantee and a R1,6 billion loan, to ensure the airline’s ongoing business activities.

As far as the ongoing business was concerned Meyer said, “Every year auditors look at our statements and determine whether we have enough cash flow on hand to be able to operate for the next 18 months.

“This is where the figure of R1,6 billion comes from. This year we will go through the same process and the guarantee will probably have to be higher.”

Meyer said the airline’s debt level was very high.

Transport deputy director-general Raisibe Lepule confirmed these discussions to Beeld.

“For SAA to grow as an airline and to fulfil its mandate we have to ensure that the airline becomes a stronger brand that is properly capitalised.”

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