From Business Day Live.
South African Airways will acquire 20 Airbus A320 aircraft for R10 billion ($1.1 billion) starting in July to address fuel inefficiency for the troubled airline, Public Enterprises Minister Malusi Gigaba said Tuesday.
The airline cut some of its European routes to focus on African destinations with a guarantee of R5 billion from the South African government on condition it developed a turnaround strategy, according to a report in Business Day Live.
To relieve itself of the large financial capital costs, the airline decided on a sale-and-leaseback acquisition strategy for 10 of the new Airbus A320s. A leasing company is buying the aircraft and leasing them back to the airline, SAA Chief Financial Officer Wolf Meyer said, according to the report. The airline could not find a taker for all 20 aircraft.
Gigaba said he resisted calls to privatize the airline, saying it has shown some signs of progress despite the turbulent past financial year.
Read more at Business Day Live.