South African Airways' creditors approve $596 mn rescue plan
South African Airways (SAA) which last made a profit in 2011, has received approval from creditors for a rescue plan.
July 16, 2020: South African Airways (SAA), which last made a profit in 2011, has received approval from creditors for a rescue plan that requires at least 10 billion rand ($596 million) in new funding, throwing the ball into the government’s court to come up with the cash, as per Reuters report.
Administrator Siviwe Dongwana told during a creditor meeting that the plan had been approved by 86 percent of voting interests.
The airline entered into bankruptcy in December and suspended commercial passenger flights in March when the government imposed lockdowns to contain coronavirus.
Fierce wrangling between the airline’s administrators, the government and trade unions has complicated rescue efforts, which delayed the publication of a restructuring plan until last month.
Dongwana said the department of public enterprises (DPE), the ministry responsible for SAA, had said it would give the administrators a letter with a funding commitment, in time for a deadline stipulated in the rescue plan.
It is not yet clear where funding will come from, after the finance minister allocated no new money to SAA in an emergency budget. The government says it has been talking to investors and potential partners, but has given few details.
South African Airways has 4 A350s. Out of which two were leased from Avolon, while other two from Air Mauritius. Air Mauritius is currently in voluntary administration. The Avolon fleets have now been ferried to Teruel, a Spanish aircraft graveyard towards the north-east of the country. These two aircraft have now been returned to the lessor and transferred to long-term storage in Spain.