13-Sep-2016 9:35 AM

National Treasury outlines mandate of SAA's new board and conditions of going concern guarantee

South Africa's National Treasury outlined (09-Sep-2016) the mandate of South African Airways' (SAA) recently appointed board. The primary focus is the return the airline to financial sustainability while delivering on government objectives. The airline's application for a going concern guarantee was approved with the following conditions:

  • The primary focus of the board must be to return the airline to financial sustainability;
  • The airline's strategy must be strengthened and aligned with other state-owned airlines;
  • The airline must implement more aggressive cost cutting initiatives in areas including fuel, aircraft ownership, labour, MRO and procurement;
  • The network and fleet plan must be refined to focus on routes which positively contribute to profitability. Routes making losses for more than one year should be suspended. The network plan should be aligned with other state-owned airlines;
  • The carrier must be better differentiated, enabling it to compete effectively through addressing the customer value proposition;
  • The airline must work with the National Treasury and Department of Public Enterprises in considering a possible merger with SA Express and the potential introduction of a strategic equity partner;
  • The board must commence the process of appointing a CEO, CFO and other key executives;
  • Funding must be secured to meet liquidity requirements;
  • The board must ensure the annual financial statements for FY2014/15 and FY2015/16 are finalised;
  • The airline is required to report progress on a regular basis to the National Treasury and a communication protocol was outlined. [more - original PR]

Want More News Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More