CAPE TOWN– State-owned South African Airways (SAA) has told Parliament it will need government loan guarantees and bailouts until 2021 as the company remains heavily indebted and continues to bleed losses throughout its operational routes.
Briefing parliament on the state of affairs at the national flag carrier here Tuesday, SAA chief executive officer Vuyani Jarana outlined the financial crisis facing the national airline as its annual report, financial statement, irregular fruitless and wasteful expenditure came under scrutiny.
Jarana said: The revenues of SAA are unable to cover our expenses. We have a very weak balance sheet.
Apart from being unable to meet its operational obligations, the company has been accumulating debt since 2012 and reducing this debt is one of the key elements needed to turn around its fortunes. However, the airline continues to suffer huge losses.
Our local routes are registering losses. The fleet, fuel expenses, landing rights …. it means we are everything to everyone, Jarana added.
There was little confidence on whether the airline would recover anytime soon. Incidents of theft and failure to account for the airline’s assets were complicating its turnaround strategy, he said.
SAA chairperson Johannes JB Magwaza said: There are serious levels of concern that we don’t have a full picture of. We are receiving SMS that alert us to massive theft at SAA.
He said SAA needed further capital injection to manage its turnaround strategy and to remain afloat. The airline and Eskom, the state-owned power utility, are the biggest recipients of government loan guarantees and bailouts.
Jarana defended the outside sourcing of security services to protect top executives at the airline, saying they were receiving threats. However, he declined to divulge the costs of the security.
As early as last year, some of the executives started receiving threats as we started executing the work of change and being given the work to executive forensic reports those were reported to the police.
Source: NAM NEWS NETWORK