South African Airways (SA, Johannesburg O.R. Tambo) could once more partner a foreign carrier after the airline's sole backer, the South African government, announced plans to locate potential investors for a stake in the loss-making parastatal.
"Will we look at a strategic partner? I think so. I would like them to investigate going for a strategic partner," South African Minister of Public Enterprises, Lynne Brown, told Reuters newswire.
SAA sold off a 20% stake to Swissair (Zurich) in 1999 only to buy back the shares in 2002 when the Swiss carrier went bankrupt.
The search for additional, non-governmental funding is seen as urgent given that SAA is now technically bankrupt. Brown told Bloomberg news that the state fiscus has turned down the SAA's applications for government grants with the airline instead "surviving" off state-guaranteed loans. Earlier this year, Brown said SAA will likely require ZAR50billion (USD4.64billion) in private funding if it is to remain a going concern.
Alongside struggling sister carrier, South African Express (EXY, Johannesburg O.R. Tambo), SAA has persistently relied on the national fiscus to prop up its operations in the face of growing regional and international competition. Despite generating cumulative losses of roughly ZAR16billion as of March 2013, Pretoria has rejected calls for SAA's privatization on the grounds that the carrier is a strategic asset and therefore must be kept going at all costs.
SAA's helm has also been the subject of much controversy with six board members having resigned mid-month. According to Brown, the most recent resignations were a result of the old board being split into factions, which “collectively just didn’t work.” The airline has had four chief executive officers in the past two years while various management teams and their turnaround proposals have failed to get the carrier back onto a firm financial footing.
