Government unbundles SAA

By Odwa Mjo for Times Live

South African Airways is one of several troubled state-owned entities that are undergoing restructuring.

On Monday, Reuters reported that SAA CEO Vuyani Jarana confirmed that the airline would be split into three units, just over a week after President Cyril Ramaphosa announced that Eskom would be split into three units.

Here’s what you need to know:

SAA will be split into three business units: domestic, regional and international. Each unit will have its own management.

The unbundling could also involve the sale of Air Chefs, which is the airline’s catering unit.

The splitting of units is part of SAA’s turnaround strategy to revive the airline that has been operating at a loss since 2011.

Business Day reported on Monday that the airline had secured a R3.5bn loan it needed to continue staying afloat until June.

Last week SAA was ordered to pay competitor Comair R1.1bn to settle an anti-competition case.

In 2018 the airline requested a R21.7bn bailout from the government, but only received R5bn. Business Day reported that finance minister Tito Mboweni is expected to announce some kind of financial assistance for SAA on Wednesday in his 2019/20 budget speech.

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