SAA might need more government funds before turnaround plan
The troubled South African Airlines might require additional financial assistance from the government of the country before a turnaround plan for the company can be implemented successfully.
The revival plan for the national carrier is set to turn around the company and make it self-sustainable. SA has filed a request for funds to acquire new fleet of fuel-efficient airplanes and cost of file has been increasing worldwide. These expenses would mean that the airline would mean more funds form the government to implement some of the proposals for its revival.
The state-owned airline recently utilized an emergency short-term loan of about R550-million in order to cover its fuel costs and avoid grounding of the flights. The grounding of its aircrafts would have resulted in a travel chaos for hundreds of passengers during the festive season. The government had recently agreed to offer a guarantee that allowed that company to receive R550m bank loan meant for covering fuel and other costs.
The government officials played down the development by saying that airlines around the world are facing financial difficulties and such loans are extended normally to state owned firms. The airline said that the revival will make sure that the company becomes viable and even profitable.