SAA planes could soon be grounded


The SAAs controversial bid to amend its plane-leasing deal with Airbus has been vetoed by Finance Minister Nhlanhla Nene.

JOHANNESBURG - South African Airlines (SAA) has until September to convince National Treasury to renew its licence assurances.

The airline needs assurances outside of the R14.4-billion already extended in guarantees by Treasury.

This adds to its woes, after the South Gauteng High Court ordered it to pay rival airline Nationwide over R100-million for anti-competitive behaviour.

Earlier this year, SAA had less than R100-million left of its R6-billion guarantee extended in early 2005.

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Treasury has refused to open the national purse until SAA proves its financial independence.

All commercial airlines must comply with SA Air Services Licensing Council requirements.

The council wants it to confirm whether or not Treasury will back the national carrier financially before it clears the assurances.

Although it hasn’t released its financials this year, SAA is expected to report a heavy operating loss.

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