Business News 13.9.2017 08:10 am

SAA cash crunch deepens

As suppliers have still not been paid.

South African Airways (SAA) appears to have exhausted its available cash reserves following news that suppliers have still not been paid for work done in July.

The airline has thirty-day terms with a number of suppliers that provide essential services to it. They had not been paid at the end of last week, a week after the deadline had passed.

SAA spokesperson Tlali Tlali told Moneyweb at the time: “We have a duty to ensure that we maintain our relationship with all our suppliers. We are in liaison with them on a continuous basis and have payment terms and/or arrangements in place with them.”

SAA indicated that payments to suppliers would be made during the course of this week, but as of the close of business on Tuesday, nothing had been received. The delay is now the longest some of them have had to wait for payment.

The news follows hot on the heels of a report Moneyweb broke in June that the airline had to use a VAT refund to pay salaries. Last week Moneyweb reported that the airline was cutting its fleet of aircraftimposed on it by owners because of the company’s dire financial position.

Finance minister Malusi Gigaba reiterated the urgency of the situation at the national carrier a few weeks ago when, after meeting with the CEO Initiative, he made it abundantly clear government was running out of time to put a solution in place.

National Treasury aims to have the plan to recapitalise the airline to the tune of R13 billion approved by cabinet by the end of September.

Questions to SAA had not been responded to at the time of publication.

Brought to you by Moneyweb 

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