Gigaba: SAA to be 'properly capitalised', not 'bailed out'

According to Fin24, Public Enterprises Minister Malusi Gigaba said that the government will financially support South African Airways (SAA) as it expands into Africa. Gigaba insisted that this was not a bailout, adding that the point would come when SAA would have been 'properly capitalised'.

"It is our firm view that, given the current global environment, all airlines need shareholder support," he said.

Gigaba said the nature of the support was uncertain, but "It is not a bailout, [...] SAA has not come to us and said we are in the red, help us out with money." He explained that the combination of a depressed global economy and high fuel prices necessitated shareholder's support, enabling SAA to procure a modern and fuel efficient fleet in order to remain competitive.

In February, SAA chief executive Siza Mzimela asked the government for "proper capitalisation" and insisted she was not asking for a bailout. The airline, she said, had money, but needed to raise the necessary capital to renew its fleet, introduce a premium economy cabin, which was what passengers wanted, and to expand its business class cabin, Fin24 reports.

Read the full article on www.fin24.com.