South African Airways' rescue plan approved
Carrier will receive half a billion euros
Half a billion euros: amount is considerable, to say the least, but it was deemed appropriate for the rescue of carrier South African Airways (read also the article published by AVIONEWS). Local government decided to finance the airline's restructuring plan with 10.5 billion rand (the equivalent of 500 million euros), after months and months of economic difficulties. In fact, since last December this company has been in extraordinary administration, the result of previous managements that have done nothing but increase its debt.
The same South African executive, however, tried to partially correct the shot; the loan was not properly defined a "rescue plan", but a real "assumption of responsibility of South Africa as shareholder of the carrier". In practice, as was remarked by the ministry of economy in presenting the budget of South African Airways in Parliament, "there is no escape from an obligation". The money was found thanks to a series of spending cuts, as well as some grants that have not yet been specified.
The 10.5 billion rand are added to the other 16.4 billion disbursed last February. African airline was forced to cancel the main national and international routes, although savings were not the consequence of these strategic industrial choices. The controversy is not lacking, the company is considered inefficient that puts South Africa in trouble from an economic point of view, but the government has decided to go its own way anyway.
On the subject read also the article published by AVIONEWS.
AVIONEWS - World Aeronautical Press Agency