SAA should be saved: ANC

File: Up to 48 return flights will not take to the skies next month.

File: Up to 48 return flights will not take to the skies next month.

AFP/Michele Spatari

JOHANNESBURG - Heavily-indebted South African Airways (SAA) should be retained as a national airline but needs substantial restructuring, ANC Secretary-General Ace Magashule said.

SAA is running out of cash after the government failed to provide R2-billion of emergency funding it promised when the airline entered a form of bankruptcy protection last month.

READ: SAA to passengers: No need to panic 

Government officials say they still want to give SAA the promised funds, but Finance Minister Tito Mboweni is insisting the transfer be done in a way that avoids increasing the country's budget deficit.

"SAA should be retained as a national airline, which will require substantial restructuring.

READ: Treasury working on funding for SAA

"The Cabinet should take the operational decisions needed to achieve this," Magashule said.

On Tuesday, SAA said it had cancelled more than 20 domestic flights between its Johannesburg hub and Cape Town and Durban this week, and 10 international flights to and from Munich, to save dwindling cash reserves.

EXPLAINER: What it means for SAA to be in 'business rescue'

The airline has not made a profit since 2011 and has received more than R20-billion in bailouts over the last three years.

Source
Reuters