South Africa Airways on brink of revival

There seems to be a ray of hope for one of the beleaguered African carriers, South African Airways as the carrier prepares to get out of its self-inflicted hiatus that led to a collapse.

For a restart at regaining its prominence, the crisis-ridden airline is said to be preparing for a return to service by first operating domestically before it ventures into international operations, connecting its vast network to its hub in Johannesburg according to sources close to the airline.

The carrier is said to have been issued a new all-important Airline Operator Certificate (AOC) by the South African Civil Aviation Authority (SACAA).

The source who spoke on AviationMetric on condition of anonymity disclosed that the carrier is scheduled to begin domestic routes between September and October 2021.


Troubled South African Airways

According to the source who spoke from Johannesburg, “It is an exciting time for SAA following months of uncertainty about the future of one of Africa’s strongest carriers. Activities are in top speed to ensure that the carrier is back to reckoning”.

“It has been a trying period for SAA. Official announcement for flight resumption would be made as time goes on”, he added.

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Trajectory of South African Airways crises

South Africa’s struggling national airline South African Airways (SAA) just recently exited a local form of bankruptcy protection called business rescue after roughly 17 months.

SAA was placed under administration in December 2019, and its long-standing financial woes worsened during the COVID-19 pandemic. All operations were mothballed in September 2020.

Its administrators said in a statement that they had filed a notice of “substantial implementation” of a business rescue plan with South Africa’s Companies and Intellectual Property Commission.

That meant they had “effectively discharged the business rescue and handed over the operations of SAA back to its board and executive team”, adding SAA was now solvent.

The airline is one of a handful of South African state companies that depend on government bailouts, placing the budget under huge strain at a time of rapidly rising debt.

The Department of Public Enterprises (DPE), the ministry responsible for SAA, said the government was in the final stages of negotiations with a preferred equity partner for SAA.

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“A purchase and sale agreement should be concluded in the next few weeks. This will enable capital, and much-needed technical and commercial expertise to be brought in to ensure a competitive flag carrier emerges,” it said in a statement.

Takatso 51% stake in South African Airways

South African public enterprises minister Pravin Gordhan confirmed that a private consortium would buy a 51% stake and inject over 3 billion rand ($221.6m) into long troubled South African Airways.

The government selected the Takatso Consortium, comprising infrastructure investor Harith General Partners and aviation group Global Aviation, as SAA’s preferred strategic equity partner.

The deal brings an end to years of speculation over the future of the troubled airline, which has been blighted by debt and mismanagement. The airline has received billions of Rands in government bailouts but has not turned a profit since 2011, leading to a fierce debate in which some politicians advocated its permanent closure and others supported full or part privatisation.

Consortium promises to transform SAA

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The Takatso Consortium, which says it will relaunch SAA as “a viable, sustainable, scalable and agile airline,” will own 51% and the Department of Public Enterprises 49%. The consortium said that it intends to list the airline in the future as a way of addressing future funding requirements.

The consortium is led by CEO Gidon Novick, former Comair co-CEO and co-founder of Global’s airline LIFT. Novick said that an “abundance of low-priced aircraft available globally” offered an opportunity for the re-launch, and said that transformation, including the accelerated training and promotion of qualified black pilots, would be at the heart of the relaunch.

In a statement, the consortium said that a due diligence exercise will now get under way. Once completed, the consortium will reveal details including route network roll-out, fleet selection, the leadership team, transformation, brand re-launch, technology, the future of SAA’s subsidiaries, and global partnerships.

Wole Shadare