South African Airways Seek $1.2bn Bailout from Government

• South African Airways Seek $1.2bn Bailout from Government

South African Airways joined the list of airlines seeking government bailouts as COVID-19 eroded revenue and impacted operations.

In a proposal drafted by the management of the airline, the embattled airline needs 21 billion rand or $1.2 billion to pay about 17 billion rand in debt while 2 billion rand will be used for retrenchments and another 2 billion rand will serve as working capital.

A spokeswoman for the airline quoted by Bloomberg said the draft plan “is for discussion purposes only and we await comment from the affected persons,” adding that the team has until June 8 to put together a rescue proposal.

Meanwhile, the Asset Management Corporation of Nigeria (AMCON) has asked the federal government to make bailout of the nation’s aviation industry a top priority.

AMCON explained that the intervention would help prevent job loss and support growth in the industry, especially with the high cost of maintenance and operations of businesses in the sector.

This was after Hadii Siriki, the Minister of Aviation said many airlines won’t survive the COVID-19 lockdown.

He had claimed airlines in the country are losing around N17 billion to the lockdown per month.

He said “Certainly in civil aviation, we’re in very difficult moments like everyone else…but we are worst hit than any other sector. Some N17bn monthly is being lost by the Airlines to COVID-19.”

“This is the situation of civil aviation. It is really a pathetic one and I can guarantee you that several airlines won’t come out of this unfortunately.”