Here's the latest - read & weep:
SAA seeks govt bail-out
The National Treasury has been asked to assist in improving the financial situation of South African Airways, the SABC reported on Tuesday. Public Enterprises Minister Alec Erwin said the recapitalisation will be accompanied by cost cutting efforts to improve the airline's profitability. He was speaking at a parliamentary hearing on a law that will take SAA out of the Transnet group and put it under the direct control of the Department of Public Enterprises. Erwin also said that a listing of the airline could be years away, adding that government would recapitalise the airline only in "exceptionally pressing circumstances". In comments to a parliamentary committee debating a bill to spin off SAA from transportation parastatal Transnet, the minister said it would "take years and not months" to conclude the IPO process. The bill would transfer SAA shares to the government and convert it into a public company with share capital.
SAA, which has struggled to cope with high fuel costs, fewer passengers and stiff competition from a burgeoning low-cost airline sector, turned a profit in its last financial year after several years in the red. Erwin added that he supported the principle of using the IPO as part of a turnaround strategy for the airline, which he said had a strategic value for tourism and other sectors of South Africa's economy. But he said he did not favour a long public debate over the prudence of moving ahead with the IPO. "I think, really, (it) would not be a very useful exercise. In fact it would probably jeopardise the option and foreclose our options," Erwin said. He said the state needed to be confident the airline would attract capital and hold its value after the IPO.
Man, I'm glad I'm not a taxpayer.
4HP