South Africa government defends airline’s bailout

Bloomberg

South Africa’s National Treasury has defended a controversial 10.5 billion rand ($641 million) lifeline for its bankrupt national airline, saying that setting it on the path to recovery will entice private investors.
“Government is not going to want to hold on to South African Airways (SAA) at all costs,” Treasury Director-General Dondo Mogajane said in an interview after the bailout was announced. “If that means giving up the majority shareholding, that will happen.”
While the airline hasn’t made a profit for almost a decade and has long relied on state support to fly planes, administrators appointed late last year have produced a viable rescue plan, Mogajane said. If it can be implemented, as many as five potential strategic-equity partners are waiting in the wings, he said, without naming them.
“Most of them are saying fix the old, pay off the debt — and then we will come on,” Mogajane said. The claim that a number of private investors are queuing up to take responsibility for SAA is a familiar one, having been made repeatedly this year by Public Enterprises Minister Pravin Gordhan and his department, most vocal supporters of the airline’s rescue.
Yet so far, the only potential backer to officially come forward has been Ethiopian Airlines Group, Africa’s biggest carrier, which made clear it was interested in an operational role rather than providing cash.