Ethiopian offer may be in the mix for SAA

The administrators of South African Airways (SA, Johannesburg O.R. Tambo) say they are unaware of a reported offer from Ethiopian Airlines (ET, Addis Ababa) to help out the stricken flag carrier, but those close to the process say it is one of the options being considered. The administrators are to decide on the future of SAA this week after considering a scenario where South African banks would provide only a portion of the ZAR10.3 billion rand (USD636.1 million) required for the implementation of SAA’s business rescue plan. However, they were unaware of any offer from Ethiopian Airlines, said Louise Brugman, spokesperson for business rescue practitioners Siviwe Dongwana and Les Matuson. Meanwhile, the South African government has remained tightlipped. “All these issues are being handled with the help of the transaction advisors (Rand Merchant Bank),” said Sam Mokokeli, spokesperson for the Department of Public Enterprises (DPE), SAA’s shareholder representative. “The department is not in a position to give any details.” However, sources close to the process believed that Ethiopian Airlines “was in the mix”, but would want a clean balance sheet before assisting the airline. This would not help the administrators who last week were forced to effectively mothball SAA as the airline ran out of operating cash waiting for the government to find the necessary funds. Bloomberg reports that Nick Fadugba, Chief Executive Officer of industry journal African Aviation, made a presentation to a “study group” of the ruling African National Congress on Sunday (October 4), advising that South Africa Airways partner with Ethiopian Airlines. “After a thorough analysis, our preferred strategic equity partner for SAA is Ethiopian Airlines,” Fadugba said, but didn’t qualify his recommendation, nor who else he had considered. Quoting Ethiopian’s Chief Executive Officer Tewolde GebreMariam, Bloomberg earlier reported Ethiopian Airlines was willing to provide planes, pilots and MRO services to SAA as part of a joint venture with the South African government. The carrier was not interested in helping with debt repayments or the cost of reducing the workforce, he said.