South African Airways (SA, Johannesburg O.R. Tambo) is considering holding an IPO as one possible way of raising much-needed cash. Sources who spoke to Bloomberg on condition of anonymity said the privatization move would only be feasible once technically-bankrupt SAA had progressed in its turnaround plan and broken even by 2022.

At present, the state-owned carrier survives off of government-backed guarantees the most recent of which, ZAR5 billion rand (USD343 million), was granted last month. Given the increased strain on South Africa's fiscus and the associated impact on its credit ratings, government has warned it cannot keep shouldering SAA's burden forever.

Despite Minister of Finance Tito Mboweni's blunt admission last month that SAA would struggle to find an investor willing to absorb its overall debt overhang of ZAR21 billion (USD1.44 billion), President Cyril Ramaphosa has poured cold water on the other alternative - its shut down.

"There is nothing wrong with saying we can get a strategic partner which is well-steeled in come in and be our partner and we take SAA forward," he told a question-and-answer session in the National Assembly last week. "Rather than shut it down, that is one of the options we are looking at and it promises quite a lot for future stability at SAA."

Ramaphosa added that the closure of SAA would render its debt mountain payable immediately. This, in turn, would trigger a knock-on effect on debt owed by other state-owned enterprises which could then collapse the country's fiscus.

In the meantime, Bloomberg reports that among the turnaround initiatives being pursued by SAA include potential commercial joint-ventures with other African carriers. In particular, Air Mauritius is being courted over a partnership on routes to the Asia-Pacific market.