GOVERNMENT would be unwilling to sink any more money into South African Airways and would rather consider guaranteeing a commercial loan to help the under-capitalised airline survive the current economic downturn.
 
This was the word from Dr Andrew Shaw, deputy director general: Transport Enterprise of the Department of Public Enterprises, when he addressed the Aviation Outlook Africa conference in Cape Town today (Tuesday).
 
He said SAA needed to increase its shareholder funds substantially to be at sustainable debt levels in alignment with its industry peers. However, in the current economic climate, interested investors were hard to find, so recapitalising of the airline remained a problem.
 
He said Government must make SAA “survivable over the next year or two” and it needed to identify what it could do to make the airline less dependent on the national fiscus. He said SAA could not be allowed to be dependent on bail outs because the government had many other pressing priorities of national importance. “It’s also a political question concerning what politicians believe should be the future of SAA,” he pointed out.
 
Shaw said the recent restructuring of SAA would play a big role in setting it up for the future, however it needed a more aggressive rescheduling strategy to deal with rapidly declining passenger demand internationally.
 
He believed Africa still represented the biggest growth opportunity for the airline, but this was being hampered by the lack of deregulation of airspace on the continent. Currently, only 16% of SAA revenue was generated in Africa, while 60% was generated in the international market.
 
He said the SA government’s policy had been to lead by example by deregulating its airspace. “I’m not sure what the recession will do in Africa. Governments may open up their markets and some of their carriers will not survive.”