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South Africa extend deadline to bail out its National Carrier

Given that the south African government is currently looking for ways to provide 2 billion rand (US$ 138 million) in funding for the embattled national carrier, South African Airways has said all flights are operating normally.

Although there may be “flight schedule amendments” in the future, details of those changes will be announced when finalized, SAA said in an emailed statement on Monday.

A Sunday deadline for funding was extended after the Department of Public Enterprises pledged to continue trying to persuade the Treasury to come up with the money, the Johannesburg-based Business Day newspaper reported Monday, without citing anyone.

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The embattled national carrier has been in a local form of bankruptcy protection since last month.

In December 2019, lenders agreed to provide 2 billion rand to enable SAA to continue to operate, while the government committed an equal amount through the National Treasury.

The President, Cyril Ramaphosa over the weekend said government continues to work toward finding ways to create “a restructured, modern airline.”

SAA, which last made a profit in 2011 and has received 57 billion rand in bailouts since 1994, has been struggling to pay its bills after the Treasury balked at providing it with more funding. Its finances took a further hit when staff staged a pay strike in November, grounding a number of flights and causing bookings to be canceled.

“We are determined to break with the past patterns of bailouts as these have become a moral hazard,” DPE spokesman Sam Mkokeli said in a statement on Sunday. “We are determined to contribute to the business-rescue process so that we could minimize job losses.”

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