A subsidiary of South African Airways (SAA) will acquire approximately R22.7 billion from the R10.5 billion allocated to airlines to implement the business bailout plan.
SAA Technical (SAAT) will receive RANT 1,663 million, Mango Airlines will receive Rand 891 million, and Air Chef will receive Rand 218 million.
This was after the Minister of Finance submitted a special spending bill on Tuesday.
“Despite the effective date of this law, allocations to subsidiaries … must be considered allocations and expenditures for the 2020/21 fiscal year,” the bill states.
Ravesh Rajlal, chief executive officer of the state-owned enterprise of the state treasury, said on Tuesday that the Standing Committee on Budget Allocation of Parliament was allocated to the Ministry of Finance by the DPE at the time of the allocation of funds to the SAA. Said that he notified. The expected airline restructuring when the interim board takes over may change the SAA subsidiary of the business bailout plan.
“If mangoes need more than 891 million rants, we need to consider that amount from the existing 2.7 billion rants,” he said.
Rajlal told the Commission that SAA has received nearly 50 billion rants from the government in the form of a guarantee since 2008.
“It’s hard to understand the value of the amount given to SAA. This is what we do. [National Treasury] We have issued instructions on government guarantees to make it a little more stringent as to how government guarantees are actually applied and awarded, “he said.
SAA has been receiving business bailouts since December 2019, but its subsidiaries Mango, SAAT and Air Chef have not. Therefore, SAA’s business bailout practitioners were not legally required to use the starting funds to support their subsidiaries.
SAA ended its business rescue at the end of April, and rescue workers said the airline is now “solvent-fluid.”
The three companies are competing for cash due to a lack of funding for their SAA subsidiary and the negative impact of the Covid-19 pandemic on the aviation industry.
Mango suddenly suspended its flight in April because it was unable to settle payments related to passenger service fees, landing and parking fees with the Airports Company South Africa (Acsa). However, after funding discussions with DPE, SAA and Mango’s board of directors, and the airport management company, the flight resumed.
SAAT and Air Chefs were unable to pay their staff full salary during the 2020 hard lockdown. SAAT staff receive only 25% to 50% of last year’s salary.
The National Union of Metal Workers of South Africa (Numsa), South African Cabin Crew Association (Sacca), and Solidarity previously told Moneyweb that payroll payments at SAAT in May and June were not yet clear. ..
SAA subsidiary receiving funds
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