August 21, 2020: South Africa’s government has initiated talks with private entities interested in buying into South African Airways (SAA), which needs at least R10 billion to resume operations, reports Business Tech.

A team from the department of public enterprises and advisors from FirstRand Ltd’s Rand Merchant Bank began negotiations after receiving as many as four promising proposals regarding SAA, according to Kgathatso Tlhakudi, the DPE’s director-general.

The state ideally wants SAA to resume operations by the year-end, he said, although much will depend on a pickup in demand amid the Covid-19 pandemic.

While Tlhakudi declined to identify SAA’s suitors, the government has said previously that approaches have been made by private-equity firms and potential aviation partners. Ethiopian Airlines in the past has expressed its interest.

SAA has been in administration since December.

SAA’s administrators agreed with the government and labour groups to cut the workforce to about 1,000 employees from more than 4,000 and that process should be completed by the end of September, Tlhakudi said.

The last of SAA’s A350 has left Johannesburg recently. Following the departure of two A350s in July, the final two are being returned to Air Mauritius.

SAA’s relationship with A350 was for a short-term. It was hoped that the arrival of these high capacity, efficient jets would allow it to streamline operations and shed inefficient aircraft like its A340s. But SAA’s financial situation coupled with the Covid-19 led the fleet to stay grounded.

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