South Africa Puts Aside More Money For Struggling SAA

The South African Government has thrown cash-strapped South African Airways another lifeline. $212 million has been “provisionally” set…

South Africa Puts Aside More Money For Struggling SAA

The South African Government has thrown cash-strapped South African Airways another lifeline. $212 million has been “provisionally” set aside by the government for the airline this current financial year. This comes despite earlier assurances from the government that there would be no more money for the state-owned airline.

$212 million has been provisionally set aside for South African Airways this financial year. Photo: Getty Images.

Airline grounded, out of money, and funding halted

South African Airways has been in the local equivalent of Chapter 11 since late 2019 with the aim of restructuring the airline into a more sustainable ongoing concern. South African Airways has been mired in financial, management, and government interference problems for years.

In April this year, the South African Government declined to provide any more funding or financial guarantees for the airline.

“On 14 April 2020, the business rescue practitioners received a response from government … that government is unable to provide additional funding to sustain the business rescue process,” said a report in Reuters.

In March, the airline had halted its international operations in the face of the pandemic. The outlook for South African Airways was poor. Shortly afterward, domestic flight operations stopped, and the airline’s CEO, Zuks Ramasia, resigned after a short nine-month tenure.

SAA-Government-Funds-Set-Aside-getty
With planes grounded the prognosis for South African Airways was grim. Photo: Getty Images

Government frustration at the slow pace of business rescue

The pundits were writing the airline off. It had already received over $1 billion in bailouts over the past three years. But South African Airways enjoys strong government support and is like a cat with nine lives. Despite the airline undergoing restructuring, the South African Government was proving resistant to any sale of assets or talk of liquidation. This was despite them declining to continue funding the national carrier.

Amid rising frustrations at the slow pace of the restructuring process being carried out by global professional services firm Alvarez & Marsal, the South African Government last week asked for a business plan to be delivered within 25 days.

The chairman of the Standing Committee on Public Accounts, Mkhuleko Hlengwa, said last week;

“The more they provide answers, the more questions arise. It is a case of classical musical chairs. It’s what has characterized the operation over the past five months. It’s what has landed us with a Rand 10 billion bill.”

The ongoing relationship between the minister responsible for the airline, Pravin Gordhan, and the firm restructuring South African Airways is said to be “tense.”

SAA-Government-Funds-Set-Aside-getty
The South African Government is said to be frustrated at the slow pace of the business rescue. Photo: Getty Images.

Funding halt reversed, ‘provisional’ funding set aside

Now the government appears to have reversed its April stance of no more funding. Flight Global is reporting that $212 million has been set aside for South African Airways this financial year. A further $9 million has been set aside for offshoot SA Express. The South African financial year runs from March 1 to the end of February.

Deputy Director-General of the Department of Public Enterprises, Kgathatso Tlhakudi, quoted this amount when appearing before the parliamentary portfolio committee on public enterprises on Wednesday.

There are also ongoing financial allocations for the 2021-22 and 2022-23 financial years.

At first glance, that might appear to lock in South African Airways for the next few years at least. But these allocations are “provisional,” and the South African Government is notorious for promising funding that doesn’t materialize.

That said, it’s a state of play the management of South African Airways is used to. So while the airline might have one foot in the grave, the whole body isn’t in there yet. Given South African Airways’ record, it is probably premature to start filling in the grave quite yet.

Source : Simple Flying More   

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When Might India Allow International Flights To Resume?

With yesterday’s announcement that India will resume domestic flights from next week, when could we see international flights…

When Might India Allow International Flights To Resume?

With yesterday’s announcement that India will resume domestic flights from next week, when could we see international flights again? India decided to ban all international flights in late March to prevent imported cases of the virus. Since then, the government has operated hundreds of repatriation flights but given no indication of when scheduled flights will return. Let’s find out more.

India banned all international flights in late March. Photo: Getty

International flights remain tricky

Looking at countries that have contained the virus we can clearly see that international flights remain a challenge. China, the country of origin and the first to recover from the virus, allowed international flights to begin, only to see a number of imported cases. These imported cases led to the government adding restrictions on the number of flights allowed to ply.

China Southern Daxing Airport
China was forced to add restrictions after international flights led to a rise in cases. Photo: Getty Images

With the coronavirus now reaching nearly every country, it is impossible to determine whether passengers on board have the virus without lengthy processes. Emirates attempted to use rapid testing kits to ensure that no one had the virus, however, those kits proved to be inaccurate. There seems to be no safe way to minimize virus fears without prolonged quarantine or long blood tests.

What will India do?

India’s decision to restart domestic has led to a flurry of hope that international flights are on the horizon too. However, it is important to note that the government can control most aspects of domestic flights, from rules to prices. When it comes to international flights, there are a number of risks involved.

Air India
Restarting international flights will need other countries to life travel restrictions too. Photo: Getty Images

Even if India did lift its ban, countries around the world have placed restrictions on travel. According to the IATA, only a few countries haven’t imposed restrictions of some kind. These restrictions can range from government-run quarantines to self-isolation. India is also offering hundreds of repatriation flights to bring home or send back any stranded citizens, reducing chances that international flights are seen as essential.

Even when flights do restart, India might only allow flights from low-risk countries (of which there are few right now), and even then would need to put in place strict health measures. It was one of the first countries to impose a mandatory quarantine when the outbreak began, a step it could continue if flights resume. Such strict measures will likely deter any international travel.

What is the world doing?

While the coronavirus has put most of life on hold, international flights are still continuing. To ensure safety, airports and governments have taken a number of unique measures. Hong Kong has employed full-fledged coronavirus testing, along with tracking travelers, and constant airport cleaning. Other countries are also following cue and offering testing facilities to those returning abroad. However, in the midst of a global testing capacity shortage, these plans do seem difficult at a widespread scale.

Vistara 787 Dreamliner
It will likely be a while before we see Vistara’s new 787 flying internationally. Photo: Vistara

In light of all this, it seems unlikely India will resume international flights soon. Even if it does, we could see only a handful of destinations and strict health measures.

What do you think about restarting international flights? Let us know in the comments below.

Source : Simple Flying More   

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