Government says it has received ’10 offers to buy SAA’

Planes at OR Tambo international airport in Kempton Park, 20 August 2020. Picture: Neil McCartney

SAA, which has been in business rescue since December, is estimated to need at least R10 billion to resume operations.

The Department of Public Enterprises (DPE) has received a host of “unsolicited interest” from both local and international investors, for the revival of South African Airways (SAA), and is currently weighing its options, government said on Monday.

Government said it received more than 10 offers for SAA and its subsidiaries, Air Chefs, SAA Technical and Mango Airlines, at the beginning of August.

SAA, which has been in business rescue since December, is estimated to need at least R10 billion to resume operations.

Also read: DPE’s plan for SAA will see all employees retrenched with only 1,000 remaining

“The DPE believes that such investments in the airline and its subsidiaries will help support key economic sectors, including tourism, and solidify South Africa as an African gateway to international markets,” it said.

In the process, all employees would be retrenched, barring 1,000 staff members who have been selected to start the new airline on different terms and conditions.

While maintaining a certain level of presence in the ownership of the new carrier, government said it would like to see several characteristics in the new airline, as envisaged in the new business rescue plan from June, including:

  • An efficient and modern aircraft fleet with hybrid density options acquired at competitive rates ,resulting in cost efficiency;
  • An offering with the right routes, at the right times and at competitive prices;
  • A network structure that allows for connectivity at hubs, while maintaining elevated aircraft utilisation;
  • Connecting Africa to world economic hubs, while maintaining diplomatic connectivity;
  • A right-sized and motivated workforce;
  • A customer-centric airline designed to be lean, technology savvy, digitally native and agile to service all market segments;
  • Appointment of a smaller, effective, reinforced, and empowered board of directors; and
  • A centralised, single commercial team-leading fleet, network, pricing, revenue management, product, services, loyalty programme, sales, and marketing for the new airline.

Also read: DPE starts SAA rescue plan… without the R10.3bn needed to do it

According to a report by the Sunday Times SAA could relaunch as early as January 2021.

This article has been republished from Moneyweb with permission

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