From BDlive

Two of the state’s airlines — South African Airways (SAA) and South African Express (SA Express) — are so financially stricken that they cannot meet the criteria of a going concern unless they get more financial support from the government.

SAA already has a R5bn state guarantee and SA Express one of R539m. The annual financial statements of both airlines are being withheld by the Department of Public Enterprises until they can provide the assurance that they are going concerns.

Maintaining this status is critical if the airlines are to retain the confidence of lessors, lenders, creditors and customers. The pressure of the rand’s depreciation and high fuel prices on operating costs have made this difficult to maintain.

This will be the third year in succession that SAA has had to delay holding its annual general meeting (AGM) and the release of its annual results pending the receipt of state assistance.

The airline was able to hold its 2013 AGM in January this year only after the Treasury agreed to extend its R5bn guarantee.

Public Enterprises Minister Lynne Brown said on Tuesday that talks with the Treasury on further state assistance to the airlines were under way.

She said in a statement that she would submit a proposal to the Cabinet addressing “the state’s ownership of airlines and the long-term financial stability of SAA and SA Express in the not too distant future. An interministerial committee task team has been meeting for some time to discuss the various models, and concrete proposals will soon be ready”.

Ms Brown has previously mooted the idea of the state’s three airlines (the third one is low-cost Mango) being brought under a single holding company.

Read more at BDlive