Ricochet News

R6.48-billion loan to SAA approved

R6.48-billion loan to SAA approved

Finance Minister Nhlanhla Nene has approved a R6.48-billion government loan to keep struggling national carrier, South African Airways (SAA), in the air.

In a statement released by the Treasury on Thursday, the amount was only guaranteed on condition that the carrier provides a comprehensive and detailed 90-day action plan, within a month, on how it aims to return to profitability.

It also added that the plan must be stress tested “jointly by government and SAA” and that the airline has been given three months to restructure its network and fleet strategy as well as areas of cost cutting and how the cuts will be achieved.

The amount brings government’s total loan package to SAA to R14.4-billion after an initial amount of R5-billion was approved by Former Public Enterprises Minister, Malusi Gigaba, in 2012 for a period of two years.