Investment opportunities for the embattled national carrier, South African Airways (SAA), are few and far between. When it was announced that the state-owned enterprise was meeting with Dubai based airline company, Emirates, rumours of possible financing emerged.
But it wasn’t to be. Bloomberg has released a report detailing negotiation topics, in which SAA claim to have only discussed plans to revive the debt-ridden company through strengthening working relationships.
Emirates, named airline of the year 2018, has denied rumours surrounding investment in SAA. Initial speculation was compounded by President Cyril Ramaphosa’s successful Middle Eastern investment road show, whereby Saudi Arabia and the United Arab Emirates each signed $10 billion investment deals.
Dark days for SAA
The tormented SAA has promised to secure private a private equity partner in an attempt to stave off complete financial ruin.
In 2017 the national air carrier of South Africa received R10 billion from the government in bailouts. It’s been reported that SAA could barely cover its expenses without government funding.
Cumulative total government bailouts for the airline, since 1999, amount to almost R35 billion. The airline has stated that in order to keep the airline operational it will need a further R21 billion by 2021, by which time it should ‘break even.’
South African Airways alliances
According to the Bloomberg report, SAA has met Emirates, Turkish Airways, Qatar Airways, Kenya Airways, Air Mauritius, United Airlines and Singapore Airlines.
It was also rumoured that SAA had met with Abu Dhabi-based airline, Etihad. While this has neither been confirmed nor denied by the Middle Eastern airline, the company’s name does not appear on the list of prospective investors or commercial partners.
SAA and Etihad briefly had a code-sharing agreement, but it was scrapped when the South African carrier ended direct flights in 2016 between its home base in Johannesburg and Abu Dhabi.
Nigeria muscling in
Making South African Airway’s investment opportunities harder is the presence of Nigeria and it’s own battle for attention from Emirates and Etihad.
Aviation Minister, Hadi Sirika, tweeted a picture of himself with Qatar Airways CEO, Akbar Al-Baker, referring to airline boss as a potential partner or investor.