Efforts to secure the future of South African Airways (SAA) took a major step forward on Tuesday (28 January) after the carrier’s business rescue practitioners reached a preliminary funding agreement with the South African government and the country’s banking sector.
Local commercial banks will provide an initial two billion rand (£105 million) in post commencement funding (PCF) which will shore up SAA’s finances in the short-term while a full rescue plan is agreed, published and adopted, SAA said in a statement.
A second instalment of PCF, amounting to 3.5 billion rand (£185 million), has also been agreed with the Development Bank of Southern Africa, SAA confirmed late on Tuesday.
“Stakeholders of the airline should now have comfort that the rescue process is on a significantly sounder footing,” said SAA. “Passengers, travel agencies and airline partners may continue to book air travel on SAA with confidence.”
It comes after several operators vowed to stand by SAA, and the destination itself, amid the carrier’s ongoing financial difficulties – Somak Holidays, African Pride and Premier Holidays all told TTG they remained committed to South Africa.