S African Airways faces scrutiny over sale plan

Bloomberg

South African Airways (SAA) officials will be summoned to a meeting with regulators next month to disclose details about talks with potential equity partners and give assurances that any deal won’t violate foreign-ownership laws.
Under the Air Services Licensing Act of 1990, airlines must be at least three-quarters owned by South Africans to operate a domestic service. That would prevent international operators from buying more than a 25% stake from the government, unless the rules are changed.
“We are going to be calling SAA to next month’s meeting to share with us what their plans are,” said Mike Mabasa, chairman of the Air Services Licensing Council, which regulates domestic aviation within South Africa. “If they are already in conversations with strategic equity partners we need to know what that entails.”
Finance Minister Tito Mboweni said last month the government is talking with potential investors in SAA, which is technically insolvent and reliant on bailouts and other forms of state support to survive.
Ethiopian Airlines Group Chief Executive Officer Tewolde Gebre Mariam has said the continent’s biggest airline would consider taking a stake in SAA, a partner in the Star Alliance. Virgin Atlantic Airways Ltd founder Richard Branson has also indicated an interest.
“If some tough decisions need to be made, we’ll make them,” Public Enterprises Minister Pravin Gordhan said. He’s previously said the company will need to remove unnecessary costs to attract a viable buyer.
The carrier triggered a plan to cut 944 jobs — leading to a strike that’s forced the cancellation of most of its flights from Friday through Monday. Routes to some international destinations including London and New York were expected to resume from Sunday night.