South African Airways needs R21.5bn for 3-year turnaround plan

South African Airways requires R21.5bn (about N609bn) for the next three years as part its turnaround strategy to return the airline to profitability. This amount is expected to cover the airline’s debt profile of R9.2bn and the working capital of 12.5bn. The airline has in recent years been rocked with liquidity crisis with banks halting […]

South African Airways requires R21.5bn (about N609bn) for the next three years as part its turnaround strategy to return the airline to profitability.

This amount is expected to cover the airline’s debt profile of R9.2bn and the working capital of 12.5bn.

The airline has in recent years been rocked with liquidity crisis with banks halting provision of credit facility to the airline. 

But the Chief Executive Officer of the airline, Vuyani Jurana said the management has begun implementation of the turnaround strategies to strengthen the balance sheet of the airline and restored bankers’ confidence.

Already the South African government has provided a bailout of R5bn as part of the turnaround plan.

The CEO while briefing newsmen in Lagos as part of his official visit to Nigeria said, “A combined figure of R21.7bn is what will take SAA moving forward”.

“The lenders have said to us that they want a plan to profitability which we have put in place and secondly they said they want a path to debt reduction which means the current debt profile is high and we need to bring it to line and that is what we are working on. So we have started taking decisions in terms of executing growth”, he added.

According to him, part of the turnaround strategies is to improve customers’ experience and make the airline the preferred carrier of choice especially in Africa.

Jurana said the West African market especially Nigeria remains critical to its operation, stressing for about 20 years the airline commenced operations in Nigeria, it has played critical role in getting the two countries to work together.

Jurana also assured that the plan is in the offing to restore its Abuja flight which was suspended two years ago, reiterating that Nigerian route remains one of its most profitable routes.

He said, “That is why we want to continue to improve customers’ experience. We will continue to work with Nigeria and South African chambers of commerce to promote trade. I am delighted with the progress we are making.

“I am here to tell our team, our partners and to assure our customers that we are on track with the turnaround strategies”.