South African Airways has run out of money and is teetering on the edge of bankruptcy, according to information given to the country’s parliament.
It is thought the national carrier may soon be unable to pay salaries. It says that matters may improve if it gets a £45m bailout from the government by September.
The airline has lost money in each of the past seven years. Acting chief executive Musa Zwane, who has led the company for the last 18 months, has been trying to put together a recovery plan since January.
Long term it is widely reported that it requires a £743 million (13 billion rand) cash injection in order to stave off bankruptcy.
Unprofitable routes and older aircraft have all combined to ensure years of losses for the failing airline. Having received state funds in July to repay debts and £1.14 billion (20 billion rand) in government guarantees to keep it solvent, the cash is required to keep it afloat.
Credit ratings agencies have already said SAA needs to reform if it is to remain viable. They added the airline is a drain on the resources of the country which has been in recession since March and which has seen its financial ratings fall to “junk”.
Finance Minister Malusi Gigaba said: “We are in discussions about that (a bailout) and at the medium-term budget statement in October I will make the necessary announcement.”