South Africa’s government has proposed merging two of its state owned airlines.
The proposed merger of South African Airways (SAA) with SA Express and partnering the new entity with a minority equity partner is seen as a move to return SAA to profitability.
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In his budget speech, South Africa’s finance Minister Pravin Gordhan said government does not need to be invested in four airline businesses.
According to South Africa’s treasury, the financial position of SAA has deteriorated.
Treasury says in the event of a default, the government would likely be called to pay a portion of its guarantee to the airline, which stands at about $939.3 million.