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77H
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 9:25 am

VirginFlyer wrote:
77H wrote:
I would imagine the SA government will provide the capital to stay afloat? If SAA were to go under that would leave South Africa without a long haul airline correct? Has a country similar in size to South Africa (population, GDP, etc) ever had their national and only long haul carrier collapse? I know Alitalia isn't doing well but it stands to reason that there are enough large carriers in Europe (with home based close by) would be able to pick up the slack if it were to go under. SA is so isolated geographically from any other countries with large carriers. ET is probably the closest?

In terms of collapses of primary long haul carriers, Belgium (Sabena), Nigeria (Nigeria Airways), and Switzerland (Swissair) come to mind. Two of those were replaced with successful successors.

V/F


Thanks for the info. I actually wasn't aware that SN and Swiss were separate successors. I guess I was under the impression they were re-brands. Do you know of any direct (non-aviation) impacts the collapse of those airlines had on their respective countries ? Did airlines from neighboring countries step in to fill the void? BRU and ZRH are two pretty important markets.

77H
 
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VirginFlyer
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 9:38 am

77H wrote:
VirginFlyer wrote:
77H wrote:
I would imagine the SA government will provide the capital to stay afloat? If SAA were to go under that would leave South Africa without a long haul airline correct? Has a country similar in size to South Africa (population, GDP, etc) ever had their national and only long haul carrier collapse? I know Alitalia isn't doing well but it stands to reason that there are enough large carriers in Europe (with home based close by) would be able to pick up the slack if it were to go under. SA is so isolated geographically from any other countries with large carriers. ET is probably the closest?

In terms of collapses of primary long haul carriers, Belgium (Sabena), Nigeria (Nigeria Airways), and Switzerland (Swissair) come to mind. Two of those were replaced with successful successors.

V/F


Thanks for the info. I actually wasn't aware that SN and Swiss were separate successors. I guess I was under the impression they were re-brands. Do you know of any direct (non-aviation) impacts the collapse of those airlines had on their respective countries ? Did airlines from neighboring countries step in to fill the void? BRU and ZRH are two pretty important markets.

77H

My knowledge of the two isn't terribly deep, but from what I understand:

  • Swiss International was created out of Crossair, which was also owned by the SAirGroup. Swissair was grounded in October 2001, and Swiss started operating as such in March 2002. I believe there may have been some interim operation in between from memory.
  • SN Brussels Airlines was created out of DAT, a subsidiary of Sabena. Sabena ceased operations in November 2001 (following on from the collapse of Swissair), and SN Brussels Airlines began operating as such in February 2002.

Others may be able to share more detail.Interestingly in the context of this discussion, a major shareholder in South African Airways was... SAirGroup!

V/F
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BartSimpson
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 10:06 am

KarelXWB wrote:

SAA will tell Parliament on Friday that it has an "aggressive" five-year corporate plan, which has been refined with the help of aviation experts. Let's see if they can make a turn around.


I can't comment on their financial status but aviation-wise I just hope that they survive. I always enjoyed flying with them domestically and internationally.
 
GianiDC
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 10:24 am

KarelXWB wrote:

[...] which has been refined with the help of aviation experts.


One could think that such experts should already work at a big airline like SA. :duck:
 
luftaom
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 10:37 am

NZ only survived 2001 because of the massive injection of capital from the New Zealand government. Existing shareholders went from holding 100% of the company to 13% (if my memory serves me correctly).
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77H
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 10:48 am

I was thinking of creating a separate thread for this, if you feel like my question shouldn't be in this thread feel free to report for deletion and I'll create one.

My understanding is that the SA government owns a considerable amount of SAA. I've read in the past on here that the airline has been riff with mismanagement in part due to government ownership and intervention Seeing this thread, and the dire financial situation of SAA got me thinking.

There are multiple airlines around the world that are wholly or partially state owned. Air India, Alitalia, Air Tahiti Nui to name a few. All those airlines seem to be having or have had continuous financial trouble. It seems to me, that government ownership, but more so government intervention is a recipe for disaster for large airlines. There seems to almost be a cycle of despair at these airlines. Government ownership=intervention=mismanagement=poor financial results=government bailout=further government ownership, rinse, wash repeat.

If so many state owned airlines misperform relative to their privatized peers why continue to operate them as government owned enterprises? Seems to me that it's in everyone's best interest to ensure a healthy airline. Seems to me the best course of action would be to give them (SAA in the case) the necessary cash infusion (loan) to stay afloat then cut them loose. Or at the very least don't intervene in the day to day operation on the airline.

77H
 
Ugly51
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 10:48 am

I flew SAA from JNB-LDA a few times in Business Class on there 747. The service was always Hit and Miss. After flying Emirates Business Class from DXB to JNB it was a real four hour grind...
 
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readytotaxi
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 10:50 am

We had a post on this a while back.

viewtopic.php?f=3&t=1367721&p=19700325&hilit=saa#p19700325

"Carrier needs a capital injection of $1 billion over three years to survive."
It may well survive but it won't make a profit. A basket case like Alitalia.
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Ugly51
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 10:51 am

LAD sorry...... Luanda.
 
MIflyer12
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 12:21 pm

77H wrote:
I was thinking of creating a separate thread for this, if you feel like my question shouldn't be in this thread feel free to report for deletion and I'll create one.

My understanding is that the SA government owns a considerable amount of SAA. I've read in the past on here that the airline has been riff with mismanagement in part due to government ownership and intervention Seeing this thread, and the dire financial situation of SAA got me thinking.

There are multiple airlines around the world that are wholly or partially state owned. Air India, Alitalia, Air Tahiti Nui to name a few. All those airlines seem to be having or have had continuous financial trouble. It seems to me, that government ownership, but more so government intervention is a recipe for disaster for large airlines. There seems to almost be a cycle of despair at these airlines. Government ownership=intervention=mismanagement=poor financial results=government bailout=further government ownership, rinse, wash repeat.

If so many state owned airlines misperform relative to their privatized peers why continue to operate them as government owned enterprises? Seems to me that it's in everyone's best interest to ensure a healthy airline. Seems to me the best course of action would be to give them (SAA in the case) the necessary cash infusion (loan) to stay afloat then cut them loose. Or at the very least don't intervene in the day to day operation on the airline.

77H


Your comparison has a constructed bias. Government owned mismanaged carriers shamble on, while mismanaged traded or privately held carriers get acquired or liquidated. So it's the government owned basket case that get the majority of discussion in a.net.
 
IndianicWorld
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 12:23 pm

The only way they will really work on a potentially successful strategy is to start again and get rid of all government influence.
 
77H
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 12:25 pm

MIflyer12 wrote:
77H wrote:
I was thinking of creating a separate thread for this, if you feel like my question shouldn't be in this thread feel free to report for deletion and I'll create one.

My understanding is that the SA government owns a considerable amount of SAA. I've read in the past on here that the airline has been riff with mismanagement in part due to government ownership and intervention Seeing this thread, and the dire financial situation of SAA got me thinking.

There are multiple airlines around the world that are wholly or partially state owned. Air India, Alitalia, Air Tahiti Nui to name a few. All those airlines seem to be having or have had continuous financial trouble. It seems to me, that government ownership, but more so government intervention is a recipe for disaster for large airlines. There seems to almost be a cycle of despair at these airlines. Government ownership=intervention=mismanagement=poor financial results=government bailout=further government ownership, rinse, wash repeat.

If so many state owned airlines misperform relative to their privatized peers why continue to operate them as government owned enterprises? Seems to me that it's in everyone's best interest to ensure a healthy airline. Seems to me the best course of action would be to give them (SAA in the case) the necessary cash infusion (loan) to stay afloat then cut them loose. Or at the very least don't intervene in the day to day operation on the airline.

77H


Your comparison has a constructed bias. Government owned mismanaged carriers shamble on, while mismanaged traded or privately held carriers get acquired or liquidated. So it's the government owned basket case that get the majority of discussion in a.net.


Fair point. Nothing to discuss if it no longer exists.

Thanks.
 
VolvoBus
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 12:36 pm

More urgent is the R6.8 bn loan repayments due at the end of the month.The article quoted does not sound optimistic that they can be renegotiated. Many international bank loans contain cross-default clauses,so that if any outstanding loan is declared in default,all loans containing these clauses are in default. Thus it is not impossible that SA government have to come up with a heck of a lot more cash even without the turn-around plan. SAA seems to be another basket-case that has had so many turn-around schemes that it is getting giddy.

Perhaps somebody with more knowledge of lease agreements could tell us whether cross-default clauses are common there ?
 
DexSwart
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 1:07 pm

As a South African, I love SAA.

And because I love SAA, I think it should just die a peaceful death. Let it die with some dignity, if there is such a thing for a large company.

The only way I can see it working out positively is if the kangaroo court that is the South African government sell their stake and allow privatization.
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ikramerica
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 1:26 pm

Why are they struggling so much when the rest of the industry is thriving? Air travel has boom bust cycles, but this is generally thought of as the boom period.
Of all the things to worry about... the Wookie has no pants.
 
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vhtje
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Re: SAA Is Broke, Cashflow Documents Show

Thu Aug 03, 2017 1:43 pm

77H wrote:
I was thinking of creating a separate thread for this, if you feel like my question shouldn't be in this thread feel free to report for deletion and I'll create one.

My understanding is that the SA government owns a considerable amount of SAA. I've read in the past on here that the airline has been riff with mismanagement in part due to government ownership and intervention Seeing this thread, and the dire financial situation of SAA got me thinking.

There are multiple airlines around the world that are wholly or partially state owned. Air India, Alitalia, Air Tahiti Nui to name a few. All those airlines seem to be having or have had continuous financial trouble. It seems to me, that government ownership, but more so government intervention is a recipe for disaster for large airlines. There seems to almost be a cycle of despair at these airlines. Government ownership=intervention=mismanagement=poor financial results=government bailout=further government ownership, rinse, wash repeat.

If so many state owned airlines misperform relative to their privatized peers why continue to operate them as government owned enterprises? Seems to me that it's in everyone's best interest to ensure a healthy airline. Seems to me the best course of action would be to give them (SAA in the case) the necessary cash infusion (loan) to stay afloat then cut them loose. Or at the very least don't intervene in the day to day operation on the airline.

77H


This will not sit well with the majority of A.netters (where the mantra seems to be Right Wing Is the Right Way ALWAYS, particularly amongst US-based posters), but there are also plenty of majority Government-owned and fully Government-owned airlines that do either reasonably well (that is, no worse than their private competitors) or, indeed, do very well:

NZ (53% owned by NZ Government)
SQ (56% owned by Tamesek which is the investment arm of the Singapore Government)
LO
GF
JU
SU
CA
ET
TK
GA (61% owned by the Indonesian Government)
TG (51% owned by the Thai Government)
VN
AY
RJ
... plus many more.

Then, of course, there are the ME3 - EK, QR, EY - but do let's not go there, as the level of subsidy these airlines may or may not receive is a subject of much debate on this forum and elsewhere.

The point I am trying to make is: Government ownership of an airline is not an immediate recipe for mismanagement and poor financial performance. If the airline is well-managed, that good management is not necessarily a reflection of who owns it; similarly if it is poorly-managed, then the same applies. There are plenty of poorly-managed privately held airlines.
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SkyVoice
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Re: SAA bailed out by government again

Fri Aug 04, 2017 4:27 am

What's happening to SAA surely comes as no surprise, but--to clean up & reword an old adage--finally, the FOD is about to hit the fan blades! Click this link to read what the BBC said today.

http://www.bbc.com/news/business-40813582
"Tough times never last. Tough people do." - Dr. Robert H. Schuller
 
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Narfish641
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Re: SAA bailed out by government again

Fri Aug 04, 2017 6:18 am

SkyVoice wrote:
What's happening to SAA surely comes as no surprise, but--to clean up & reword an old adage--finally, the FOD is about to hit the fan blades! Click this link to read what the BBC said today.

http://www.bbc.com/news/business-40813582


Can I say they're about to be screwed? :crackup:
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behramjee
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Re: SAA bailed out by government again

Fri Aug 04, 2017 10:50 am

a recent article I've just published on how to help fix South African Airways can be read here...its very long and offers decent insight.

Please do read it and let me know your constructive feedback...thanks

https://airline-news.blogspot.com/2017/ ... rways.html
 
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readytotaxi
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Re: SAA bailed out by government again

Fri Aug 04, 2017 12:02 pm

Key to this will be overseas fuel suppliers, they get the slightest wiff of nonpayment down the line they will cut supplies. No international routes if you can't get back. You could of course pay cash, imagine that stored in the cockpit. :o
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gunnerman
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Re: SAA bailed out by government again

Fri Aug 04, 2017 1:16 pm

behramjee wrote:
a recent article I've just published on how to help fix South African Airways can be read here...its very long and offers decent insight.

Please do read it and let me know your constructive feedback...thanks

https://airline-news.blogspot.com/2017/ ... rways.html

You don't mention the cost of grounding 17 aircraft, which muat all be parked securely which costs money. Furthermore, any lease or loan payments relating to the aircraft still need to be made.

How does it make sense to restrict EK's flights into JNB and CPT when SA operates no parallel routes and codeshares on EK's flights.

Your article is focused on aircraft and flights, but the real problem is that the company is badly run, so surely needs as a priority a top CEO with the authority to make big changes to make it profitable.
 
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Narfish641
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Re: SAA bailed out by government again

Sat Aug 05, 2017 4:14 am

http://www.travelweekly.co.uk/articles/285125/south-african-airways-faces-bankruptcy

Either it's one of the same articles talking about the situation, or it got a whole lot worse... This is not good to hear at all.... :frown:
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kitplane01
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Re: SAA Is Broke, Cashflow Documents Show

Sat Aug 05, 2017 4:46 am

77H wrote:

I would imagine the SA government will provide the capital to stay afloat? If SAA were to go under that would leave South Africa without a long haul airline correct?


If SAA disappeared tomorrow, South African international air travel would continue just fine. Other international airlines would see, and service, the new opportunities. South Africa does not need SAA to bring in tourists, British Airways and American Airlines would be happy to do that.

Hard to believe that the best possible way to help South African poor people is to subsidize an international airline.
 
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LamboAston
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Re: SAA bailed out by government again

Sat Aug 05, 2017 5:44 am

As a long haul replacement for the A340s, for the longer routes that can't take an A330, would a 330NEO be able to fly it, or would they have to go to 787/A350?
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jfk777
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Re: SAA bailed out by government again

Sat Aug 05, 2017 12:38 pm

LamboAston wrote:
As a long haul replacement for the A340s, for the longer routes that can't take an A330, would a 330NEO be able to fly it, or would they have to go to 787/A350?


Every time I have flown to London Heathrow recently I have noticed SAA A330-200 but no A340's which is interesting. SAA should dump the A340 and fly only A330 for Long Haul which works for the double daily LHR flights, SAA's flagship route. IF flying only A330 means no SAA flights to Perth, Hong Kong or JFK so be it, they are gas guzzling planes. IF all flights to the USA have to be one-stop by A330 so be it. Sao Paulo is viable with A330 too. Maybe flying only A330 is a radical idea but SAA needs "radical" ideas not the recycled ideas.
 
trees
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Re: SAA bailed out by government again

Sat Aug 05, 2017 2:13 pm

jfk777 wrote:
LamboAston wrote:
As a long haul replacement for the A340s, for the longer routes that can't take an A330, would a 330NEO be able to fly it, or would they have to go to 787/A350?


Every time I have flown to London Heathrow recently I have noticed SAA A330-200 but no A340's which is interesting. SAA should dump the A340 and fly only A330 for Long Haul which works for the double daily LHR flights, SAA's flagship route. IF flying only A330 means no SAA flights to Perth, Hong Kong or JFK so be it, they are gas guzzling planes. IF all flights to the USA have to be one-stop by A330 so be it. Sao Paulo is viable with A330 too. Maybe flying only A330 is a radical idea but SAA needs "radical" ideas not the recycled ideas.


Perth, Hong Kong and JFK are some of the few routes SA flies that are actually reasonably profitable but because they are flown with A340 you want to axe them?
 
trees
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Re: SAA bailed out by government again

Sat Aug 05, 2017 2:14 pm

jfk777 wrote:
LamboAston wrote:
As a long haul replacement for the A340s, for the longer routes that can't take an A330, would a 330NEO be able to fly it, or would they have to go to 787/A350?


Every time I have flown to London Heathrow recently I have noticed SAA A330-200 but no A340's which is interesting. SAA should dump the A340 and fly only A330 for Long Haul which works for the double daily LHR flights, SAA's flagship route. IF flying only A330 means no SAA flights to Perth, Hong Kong or JFK so be it, they are gas guzzling planes. IF all flights to the USA have to be one-stop by A330 so be it. Sao Paulo is viable with A330 too. Maybe flying only A330 is a radical idea but SAA needs "radical" ideas not the recycled ideas.


Perth, Hong Kong and JFK are some of the few routes SA flies that are actually make money but because they are flown with A340 you want to axe them?
 
evanb
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Re: SAA bailed out by government again

Sat Aug 05, 2017 2:26 pm

behramjee wrote:
a recent article I've just published on how to help fix South African Airways can be read here...its very long and offers decent insight.

Please do read it and let me know your constructive feedback...thanks

https://airline-news.blogspot.com/2017/ ... rways.html


You make the assumptions that SAA's problems are a result of operational inefficiencies, which they are not. They are the result of poor governance, decision making, leadership and balance sheet management.

Yes, the SAA fleet have higher fuel costs, but they also come with fairly low lease costs. Grounding A340s would raise the lease costs and potentially compromise payload/revenue on some routes.
 
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LAXintl
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Re: SAA bailed out by government again

Mon Aug 07, 2017 3:41 pm

SAA lenders agreed to postpone USD $515mil payment of loans originally due in July till end September 2017.

Buys company (and government) some time..
From the desert to the sea, to all of Southern California
 
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LAXintl
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Re: SAA bailed out by government again

Mon Aug 28, 2017 8:36 am

SA government to decide by end of September how to recapitalize airline.

Estimated airline requires 10 billion rand (~USD 750mil)

Government exploring options including a share equity, public-private partnerships and share swap. Government considering selling its 39 percent stake in landline provider Telkom to fund SAA.


https://www.thesouthafrican.com/final-c ... september/

=
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mercure1
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Re: SAA bailed out by government again

Mon Aug 28, 2017 12:10 pm

You can tell the government really loves the airline as they are willing to sell the phone company and use the proceeds to keep airline going.

Strange priorities.
mercure f-wtcc
 
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jnev3289
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Re: SAA bailed out by government again

Mon Aug 28, 2017 1:07 pm

To the SA government: What is the definition of insanity?
 
SonOfABeech
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Re: SAA bailed out by government again

Mon Aug 28, 2017 1:28 pm

mercure1 wrote:
You can tell the government really loves the airline as they are willing to sell the phone company and use the proceeds to keep airline going.

Strange priorities.


You can't use a phone company to travel to London or New York with your cronies, can you? ;)
 
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readytotaxi
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Re: SAA bailed out by government again

Mon Aug 28, 2017 1:34 pm

mercure1 wrote:
You can tell the government really loves the airline as they are willing to sell the phone company and use the proceeds to keep airline going.

Strange priorities.

I sincerely doubt that ALL the proceeds will be pumped into the airline, ;) ;)
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LAXintl
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Re: SAA bailed out by government again

Mon Aug 28, 2017 9:09 pm

Suppose it's more fun to own 100% of a sinking airline than 39% of a phone company for government ministers.
From the desert to the sea, to all of Southern California
 
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KarelXWB
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Re: SAA bailed out by government again

Wed Sep 06, 2017 11:28 am

Fleet reductions may be inevitable:

South African Airways (SA, Johannesburg O.R. Tambo) will cut capacity at its mainline operation as part of an overall downsizing of the carrier's network. The changes are part of the cash-strapped airline’s implementation of its newly developed five-year turnaround plan, its eleventh, that seeks to return the company to financial sustainability in the shortest time possible.

To that end, the chairman of the SAA Pilots Association, Jimmy Conroy, told Moneyweb in an interview that the pilot corps had been informed that SAA's fleet could be reduced by up to 20%.

...

"South African Airways (SAA) confirms that it will introduce network changes on the domestic and regional segments of its route network," spokesman Tlali Tlali said. "The changes relate to the replacement of SAA’s own metal service on certain routes and not total withdrawal. SAA will leverage its partnership with its sister airlines and will still maintain its SA code in those markets."


Article
https://www.ch-aviation.com/portal/news ... uring-plan
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jnev3289
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Re: SAA bailed out by government again

Wed Sep 06, 2017 1:13 pm

Kind of nuts that we could see the complete demise of 3 major airlines all within the same relative time span. (AirBerlin, Alitalia, and SAA)
 
ExDubai
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Re: SAA bailed out by government again

Wed Sep 06, 2017 6:13 pm

gunnerman wrote:
You don't mention the cost of grounding 17 aircraft, which muat all be parked securely which costs money. Furthermore, any lease or loan payments relating to the aircraft still need to be made.

How does it make sense to restrict EK's flights into JNB and CPT when SA operates no parallel routes and codeshares on EK's flights.

Your article is focused on aircraft and flights, but the real problem is that the company is badly run, so surely needs as a priority a top CEO with the authority to make big changes to make it profitable.

That wouldn't help. As long as Dudu is there nothing will change.
Better to reign in hell than serve in heaven
 
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piedmontf284000
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Re: SAA bailed out by government again

Wed Sep 06, 2017 6:25 pm

KarelXWB wrote:
Fleet reductions may be inevitable:

South African Airways (SA, Johannesburg O.R. Tambo) will cut capacity at its mainline operation as part of an overall downsizing of the carrier's network. The changes are part of the cash-strapped airline’s implementation of its newly developed five-year turnaround plan, its eleventh, that seeks to return the company to financial sustainability in the shortest time possible.

To that end, the chairman of the SAA Pilots Association, Jimmy Conroy, told Moneyweb in an interview that the pilot corps had been informed that SAA's fleet could be reduced by up to 20%.

...

"South African Airways (SAA) confirms that it will introduce network changes on the domestic and regional segments of its route network," spokesman Tlali Tlali said. "The changes relate to the replacement of SAA’s own metal service on certain routes and not total withdrawal. SAA will leverage its partnership with its sister airlines and will still maintain its SA code in those markets."


Article
https://www.ch-aviation.com/portal/news ... uring-plan


Shouldn't be too complicated. The six 738's are 16 yrs old and there are six A346 that are 15. The A346 are gas guzzlers anyways and SA will have to cut some long haul operations to help trim costs. Retiring them to the desert sooner then later will probably help
 
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LAXintl
Posts: 24963
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Re: SAA bailed out by government again

Tue Sep 19, 2017 4:02 pm

SA Treasury has agreed to grant SAA R10bn (USD $750) cash injection.

National Treasury Director-General Dondo Mogajane stressed the importance of saving South African Airways from financial ruin. He maintains that a default on SAA’s finances would devastate the government’s other SOEs.

Treasury grant a R10bn cash injection to South African Airways
https://www.thesouthafrican.com/saa-get-r10bn-bailout/

=
From the desert to the sea, to all of Southern California
 
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jnev3289
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Re: SAA bailed out by government again

Tue Sep 19, 2017 4:49 pm

No words...
 
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mercure1
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Re: SAA bailed out by government again

Tue Sep 19, 2017 5:13 pm

Lets see how long it takes to burn this cash, and SA finds itself begging for another handout.
mercure f-wtcc
 
evanb
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Re: SAA bailed out by government again

Tue Sep 19, 2017 6:39 pm

SAA have about R10 billion in debt which is guaranteed by the Treasury. If they don't provide the cash and SAA go under (which would in all likelihood happen) it would result in cascading calls on other Treasury guaranteed debt. They have been left with few options. One just hopes that they provide this under the right conditions to ensure that SAA find some degree of sustainability.
 
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readytotaxi
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Re: SAA bailed out by government again

Tue Sep 19, 2017 7:06 pm

Hands up who wants to join their FF programe :eek:
you don't get a second chance to make a first impression!
Growing older, but not up.
 
ExDubai
Posts: 229
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Re: SAA bailed out by government again

Tue Sep 19, 2017 7:11 pm

evanb wrote:
SAA have about R10 billion in debt which is guaranteed by the Treasury. If they don't provide the cash and SAA go under (which would in all likelihood happen) it would result in cascading calls on other Treasury guaranteed debt. They have been left with few options. One just hopes that they provide this under the right conditions to ensure that SAA find some degree of sustainability.

Do you believe in miracles? A fish rots from the head down or in that case from the "chairwomen" down. As long as the chairwomen is in charge nothing will change
Better to reign in hell than serve in heaven
 
PDPsol
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Re: SAA bailed out by government again

Tue Sep 19, 2017 7:21 pm

evanb wrote:
SAA have about R10 billion in debt which is guaranteed by the Treasury. If they don't provide the cash and SAA go under (which would in all likelihood happen) it would result in cascading calls on other Treasury guaranteed debt. They have been left with few options. One just hopes that they provide this under the right conditions to ensure that SAA find some degree of sustainability.


This has happened before, with PLUNA in Uruguay, leading to a messed-up political scandal post-bankruptcy. PLUNA was the subject of a failed 'privatization' to VARIG many years ago, followed by a government-supported acquisition by local private equity group, Leadgate. Unfortunately, the government agreed to guarantee a $120 MM loan from Export Development Canada to finance the CRJ-900 fleet acquisition. When PLUNA entered liquidation, and the CRJ-900 sale proceeds were insufficient to cover the obligation, the Uruguayan government had to make itself responsible for the unpaid loan principal, causing a major political scandal.
 
evanb
Posts: 924
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Re: SAA bailed out by government again

Tue Sep 19, 2017 8:17 pm

ExDubai wrote:
evanb wrote:
SAA have about R10 billion in debt which is guaranteed by the Treasury. If they don't provide the cash and SAA go under (which would in all likelihood happen) it would result in cascading calls on other Treasury guaranteed debt. They have been left with few options. One just hopes that they provide this under the right conditions to ensure that SAA find some degree of sustainability.

Do you believe in miracles? A fish rots from the head down or in that case from the "chairwomen" down. As long as the chairwomen is in charge nothing will change


The use of the word hope shows my lack of confidence in this "miracle".
 
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SR380
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Re: SAA Is Broke, Cashflow Documents Show

Tue Sep 19, 2017 9:03 pm

77H wrote:
VirginFlyer wrote:
77H wrote:
I would imagine the SA government will provide the capital to stay afloat? If SAA were to go under that would leave South Africa without a long haul airline correct? Has a country similar in size to South Africa (population, GDP, etc) ever had their national and only long haul carrier collapse? I know Alitalia isn't doing well but it stands to reason that there are enough large carriers in Europe (with home based close by) would be able to pick up the slack if it were to go under. SA is so isolated geographically from any other countries with large carriers. ET is probably the closest?

In terms of collapses of primary long haul carriers, Belgium (Sabena), Nigeria (Nigeria Airways), and Switzerland (Swissair) come to mind. Two of those were replaced with successful successors.

V/F


Thanks for the info. I actually wasn't aware that SN and Swiss were separate successors. I guess I was under the impression they were re-brands. Do you know of any direct (non-aviation) impacts the collapse of those airlines had on their respective countries ? Did airlines from neighboring countries step in to fill the void? BRU and ZRH are two pretty important markets.

77H


Swissair wasn't grounded for a long time. It restarted its operation under a loan from the Swiss gouvernement. Crossair baught the asset and kept some aircraft/staff, even the IATA code SWR to keep international tragic rights.

The "merger" between Crossair and Swissair led the path for Swiss International Airlines.

The airline had a rocky start, and it's not before it was baught by Lufthansa and joined StarAlliance than it started to make money again. Today technically it's 100% German controlled. They are keeping the brand alive because obviously it's an amazing money maker.

Here it is. Thanks for mismanagement and our dear friends at McKinsey and their "Hunter Stategy".
 
VSMUT
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Joined: Mon Aug 08, 2016 11:40 am

Re: SAA Is Broke, Cashflow Documents Show

Tue Sep 19, 2017 9:19 pm

SR380 wrote:
Here it is. Thanks for mismanagement and our dear friends at McKinsey and their "Hunter Stategy".


I don't think McKinsey can be matched by anyone else on this planet when it comes to f****** over its customers. I doubt anyone has ever gained anything from those greedy beancounters. The company is a vicious form of cancer.
 
evanb
Posts: 924
Joined: Thu Jan 07, 2016 3:26 pm

Re: SAA Is Broke, Cashflow Documents Show

Tue Sep 19, 2017 10:04 pm

VSMUT wrote:
I don't think McKinsey can be matched by anyone else on this planet when it comes to f****** over its customers. I doubt anyone has ever gained anything from those greedy beancounters. The company is a vicious form of cancer.


Maybe Bain. They did a good job of asset stripping SAA back in the day.

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