A South African Airways aircraft is seen at O.R. Tambo International Airport in Johannesburg, South Africa January 12, 2020. (REUTERS)
A South African Airways aircraft is seen at O.R. Tambo International Airport in Johannesburg, South Africa January 12, 2020. (REUTERS)

South Africa agrees to privatise grounded state airline

The SAA, despite being one of the largest airlines in Africa -- second only to the Ethiopian Airlines -- had not turned in a profit since 2011. It was placed under a state-approved rescue plan in December 2019 to save it from collapse.
By hindustantimes.com | Edited by Joydeep Bose
PUBLISHED ON JUN 11, 2021 04:05 PM IST

South Africa has agreed to sell the federal government's majority stake in the cash-strapped national airlines, the South African Airways (SAA), to a consortium that includes a local private equity firm and a jet leasing company, the country's public enterprises minister Pravin Gordhan informed on Friday. The SAA, the second-largest airline in the entire continent, was grounded in December last year and had since been a drain on state finances, news agencies reported.

The SAA, despite being one of the largest airlines in Africa -- second only to the Ethiopian Airlines -- had not turned in a profit since 2011. It was placed under a state-approved rescue plan in December 2019 to save it from collapse, AFP reported, adding that the airline was one of the many symbols of "the mismanagement of state-owned enterprises" that characterised ex-South African president Jacob Zuma's regime. The airlines was having a hard time surviving even way before the coronavirus disease (Covid-19) pandemic, only managing to survive on state bailouts.

"Having evaluated the current environment, the government has agreed to the (strategic equity partner) owning of 51% of the shareholding and government 49%," South Africa's public enterprises minister Pravin Gordhan said in an online media conference.

The consortium to which South Africa is selling its national airlines comprises of private-equity firm Harith General Partners, an investor in African infrastructure and airports, and Johannesburg-based airline management and leasing firm Global Airways, which owns the recently launched domestic budget airline LIFT. The consortium will own the majority 51% share while the government will retain the minority 49% stakes in the shareholding, the minister informed, adding that the new SAA will not be "dependent" on the government.


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