The South African Government has denied any further funding to the South African Airways, the national airline which has been battling financial pain for a few years now.
According to a letter submitted to Bloomberg News dated April 14, the airline’s administrators, who were put in charge in December, were told by the state to instead source cash from available resources.
During the last 6 years, The National Airline has accrued over R26 Billion in losses which made it seek bailouts from the government from time to time for it to keep operations running.
The news of funding suspension comes after the Airline was now looking for ways to keep itself afloat after the Coronavirus pandemic which has affected the whole world has caused SAA to ground all passenger flights except those being used for repatriation of South African citizens abroad.
Earlier on, the Finance Minister Tito Mboweni had been advocating for a complete cancellation of any further funding to the national airline and has cited the closure of the airline so as to save funds which can be used in the fight against Coronavirus.
“All options are now blocked to any form of real continuation of the airline,” said Peter Attard Montalto, head of capital markets research at Intellidex. “Basically the only option now is liquidation.”
SAA’s external debt is guaranteed by the state in the event of the carrier’s collapse.