South Africa is on the hunt for minority investors and loan financing in a bid to accelerate the growth of South African Airways (SAA). This move comes in the wake of a failed equity deal.
Derek Hanekom, interim Chairman of South African Airways, revealed this development during an interview with eNCA, a prominent South African news channel, as reported by Bloomberg over the weekend.
Hanekom disclosed that the national flag carrier has reassessed its expansion strategy following the collapse of previous discussions. As a result, plans to open up additional international routes to key destinations like London, Frankfurt, and North America have been put on hold for the time being.
- “If we are able to get capital from whatever source, then we may be able to expand more rapidly,” Hanekom said on eNCA.
- “The airline is currently growing at a slow but sustainable rate, with no government subsidies,” he added.
More insight
The South African government had initially intended to sell off a 51% stake in SAA to the Takatso Group, comprising closely held Global Airways and the private equity firm Harith General Partners. However, the deal hit a roadblock and was scrapped just last month.
This transaction was poised to infuse the airline with a substantial cash injection of 3 billion rand ($157 million). The SAA, which recently emerged from extensive bankruptcy proceedings after years of relying on state bailouts, had pinned hopes on this deal for its financial recovery and expansion.
Revealing more plans for South Africa’s national flag carrier, Hanekom announced that within the upcoming fiscal year, SAA is poised to expand its fleet from 13 to 21 aircraft.
Additionally, the interim Chairman of the airline highlighted the introduction of several new routes within Africa, alongside the inauguration of international connections to Sao Paulo and Perth, Australia.
Moreover, Hanekom disclosed that efforts are underway to recruit permanent executives for SAA and certain subsidiary units, signalling a proactive step towards consolidating and enhancing the airline’s leadership structure.
