SAA after Business rescue

[Fransw]

SAA is debt free.

BUt needs a capital injection

https://www.moneyweb.co.za/news/south-a ... debt-free/

[Airplaneguy9]

But needs a capital injection

Only if they want to push forward some of the plans they have, such as upscaling international routes.

In other news, SAA is taking on four SunExpress 738s, which I'm guessing are the two from last year (TC-SEZ and TC-SOB) and two more, with the first arriving in November.
https://www.moneyweb.co.za/news/compani ... ak-season/

[Dougie]

SAA seeks amicable solution to Zimbabwe asset threat

South African Airways (SA, Johannesburg O.R. Tambo) is optimistic about an amicable solution to a current impasse with Zimbabwe after the neighbouring country threatened to attach the airline's assets over an alleged USD2.4 million in unpaid fees despite Zimbabwe withholding ZAR1 billion rand (USD57 million) worth of unremitted SAA ticket sales.

"The conduct of the Ministry of Environment in Zimbabwe is contrary to the letter and spirit of our protracted engagements, first with the Reserve Bank of Zimbabwe and later with the Ministry of Finance, on collecting the major debt of around ZAR1 billion due to SAA," CEO John Lamola, said in a statement. "Our doors of engagement remain open. We are optimistic that an amicable solution to the current impasse will be found, and that Zimbabwe’s Ministry of Environment will desist from its threatened action against SAA’s operations in Zimbabwe," he said.

SAA said following three years of negotiations with the Reserve Bank of Zimbabwe, it had reached an agreement with Zimbabwe’s permanent secretary of finance and economic development, George Guvamatanga, for the repayment of its funds blocked since 2016 due to the country's chronic foreign currency shortages.

Despite this, Zimbabwe's environment ministry has claimed USD2.4 million in unpaid meteorological weather service fees from SAA for the period between 2006 and 2014. SAA reported a payment of USD877,435 toward this debt in November 2023. Despite this, the ministry has taken legal action, securing a court order for USD1.6 million and a writ of execution against SAA's property in Zimbabwe.

SAA said it was contesting the Zimbabwean ministry's claim for unpaid fees, labelling it "malicious and unnecessarily disruptive," especially given that Zimbabwe owes SAA a larger sum. SAA said it proposed offsetting the debt against the blocked funds, but the ministry had rejected this and was moving forward with the writ of execution according to correspondence received on October 17.

"In March 2024, Guvamatanga had proposed that current invoices charged to SAA by the Airports Company of Zimbabwe, National Handling Services, and the Civil Aviation Authority of Zimbabwe, amounting to USD9 million, owing to its daily operations in Zimbabwe, be offset against the blocked funds. In addition, it was committed that the balance of USD50 million would be repatriated to SAA through quarterly payments of USD1 million beginning in July 2024, while an immediate goodwill payment of USD1 million is paid immediately. None of this materialised," the statement read.

SAA management, through its board, had in the past escalated this matter to its shareholder ministry and the relevant South African government departments.

According to court documents seen by ch-aviation, the Supreme Court of Zimbabwe on January 2020 ordered SAA to pay USD877,435 in outstanding meteorological weather services (Met) fees for the period January 2006 to April 30, 2014; all and further outstanding Met fees from May 1, 2014, to the date of final payment; interest on the above sums to date of final payment; and legal costs.

The dispute with SAA dates back to August 20, 2014, when Zimbabwe's Minister of Environment, Water, and Climate issued a summons for payment of Met fees. These fees were collected by the Civil Aviation Authority of Zimbabwe (CAAZ) under an agreement with the Meteorological Services Department (MSD), combining other user fees under a single invoice. While SAA and other airlines paid the specified CAAZ fees, they refused to pay the Met charges, contending they duplicated landing and route fees already paid to CAAZ. Mediation through IATA and ICAO from July 2006 to July 2010 was unsuccessful. A court a quo ruled against SAA affirming that the minister had the statutory standing to sue for debt recovery. SAA's May 2023 appeal against the findings was largely unsuccessful, with most grounds of appeal dismissed.

https://www.ch-aviation.com/news/146014 ... set-threat

[V5 - LEO]

....just heard on the news SAA says they are now debt free but needs a cash injection to continue operations as usual - how?

[LASS 1190]

....just heard on the news SAA says they are now debt free but needs a cash injection to continue operations as usual - how?

Hi V5-LEO, I want their accountants to do my books as well. I am no CA or financial guru but have analysed a financial report or 2 and them claiming they are debt free yet in a recent news article it states "Nevertheless, the environment ministry proceeded with legal action and obtained a court order against SAA for $1.6m. Furthermore, on October 8 2024, the ministry obtained a writ of execution against SAA’s property in Zimbabwe. SAA did not clarify what assets it had in Zimbabwe that could be attached" surely this is debt?

[V5 - LEO]

......croocked as hell this surely is, but let them and whoever believe the snot keep living happily in lallaland!

[Airplaneguy9]

....just heard on the news SAA says they are now debt free but needs a cash injection to continue operations as usual - how?

As I said above, only if they want to push forward some of the plans they have, such as upscaling international routes, and as a buffer in case the industry shuts down like it did during COVID. They are still able to continue operations as per usual with the cash reserves they have, assuming nothing goes belly-up again. If they were in financial trouble, I doubt they would have increased frequencies on the Mauritius/Perth routes, opened a new route to Lubumbashi, AND lease four more aircraft.

[LASS 1190]

....just heard on the news SAA says they are now debt free but needs a cash injection to continue operations as usual - how?

As I said above, only if they want to push forward some of the plans they have, such as upscaling international routes, and as a buffer in case the industry shuts down like it did during COVID. They are still able to continue operations as per usual with the cash reserves they have, assuming nothing goes belly-up again. If they were in financial trouble, I doubt they would have increased frequencies on the Mauritius/Perth routes, opened a new route to Lubumbashi, AND lease four more aircraft.

And looking at selling UK slots to generate cashflow? The financials are public record, what they report versus what SAA now offer in public does not talk to each other.

[Volo]

SAA seeks amicable solution to Zimbabwe asset threat

South African Airways (SA, Johannesburg O.R. Tambo) is optimistic about an amicable solution to a current impasse with Zimbabwe after the neighbouring country threatened to attach the airline's assets over an alleged USD2.4 million in unpaid fees despite Zimbabwe withholding ZAR1 billion rand (USD57 million) worth of unremitted SAA ticket sales.

"The conduct of the Ministry of Environment in Zimbabwe is contrary to the letter and spirit of our protracted engagements, first with the Reserve Bank of Zimbabwe and later with the Ministry of Finance, on collecting the major debt of around ZAR1 billion due to SAA," CEO John Lamola, said in a statement. "Our doors of engagement remain open. We are optimistic that an amicable solution to the current impasse will be found, and that Zimbabwe’s Ministry of Environment will desist from its threatened action against SAA’s operations in Zimbabwe," he said.

SAA said following three years of negotiations with the Reserve Bank of Zimbabwe, it had reached an agreement with Zimbabwe’s permanent secretary of finance and economic development, George Guvamatanga, for the repayment of its funds blocked since 2016 due to the country's chronic foreign currency shortages.

Despite this, Zimbabwe's environment ministry has claimed USD2.4 million in unpaid meteorological weather service fees from SAA for the period between 2006 and 2014. SAA reported a payment of USD877,435 toward this debt in November 2023. Despite this, the ministry has taken legal action, securing a court order for USD1.6 million and a writ of execution against SAA's property in Zimbabwe.

SAA said it was contesting the Zimbabwean ministry's claim for unpaid fees, labelling it "malicious and unnecessarily disruptive," especially given that Zimbabwe owes SAA a larger sum. SAA said it proposed offsetting the debt against the blocked funds, but the ministry had rejected this and was moving forward with the writ of execution according to correspondence received on October 17.

"In March 2024, Guvamatanga had proposed that current invoices charged to SAA by the Airports Company of Zimbabwe, National Handling Services, and the Civil Aviation Authority of Zimbabwe, amounting to USD9 million, owing to its daily operations in Zimbabwe, be offset against the blocked funds. In addition, it was committed that the balance of USD50 million would be repatriated to SAA through quarterly payments of USD1 million beginning in July 2024, while an immediate goodwill payment of USD1 million is paid immediately. None of this materialised," the statement read.

SAA management, through its board, had in the past escalated this matter to its shareholder ministry and the relevant South African government departments.

According to court documents seen by ch-aviation, the Supreme Court of Zimbabwe on January 2020 ordered SAA to pay USD877,435 in outstanding meteorological weather services (Met) fees for the period January 2006 to April 30, 2014; all and further outstanding Met fees from May 1, 2014, to the date of final payment; interest on the above sums to date of final payment; and legal costs.

The dispute with SAA dates back to August 20, 2014, when Zimbabwe's Minister of Environment, Water, and Climate issued a summons for payment of Met fees. These fees were collected by the Civil Aviation Authority of Zimbabwe (CAAZ) under an agreement with the Meteorological Services Department (MSD), combining other user fees under a single invoice. While SAA and other airlines paid the specified CAAZ fees, they refused to pay the Met charges, contending they duplicated landing and route fees already paid to CAAZ. Mediation through IATA and ICAO from July 2006 to July 2010 was unsuccessful. A court a quo ruled against SAA affirming that the minister had the statutory standing to sue for debt recovery. SAA's May 2023 appeal against the findings was largely unsuccessful, with most grounds of appeal dismissed.

https://www.ch-aviation.com/news/146014 ... set-threat

.............................................................................................

Whats the bet that the R1026 000 000 (One thousand and 26 million or a Billion if you like ) owed to SAA is still reflected in the SAA financials as an asset .
Zimbabwe has offered to settle this @ R18 000 000 ( yes million)a quarter (see above ) which translates to 14 .25 years if no interest is applied.
Apply interest which they are obliged to do and it will stretch to 20 years ..

It doesnt take a rocket scientist to work out this is never going to happen .

To top it all a Zimbabwe court rules against SAA for the payment of weather info and other fees and what do SAA do . They pay them
R15 788 000 just last year

This whole saga illustrates how disonnected the whole SAA business has been from reality that they could even get to this stage .
Why has this not been brought to parliament for debate and sanction .
Folks - this not a few million - its a BILLION

[Patrick AL]

...selling off the family jewels to fund the momentary high-... before SAA do a CFIT?


https://www.dailymaverick.co.za/article ... ale-flies/


The SAA board is weighing up the sale of a landing slot at Heathrow Airport in the UK to free up cash. A valuation by the government a few years ago valued the slot at R1-billion. It is now believed to be worth considerably more.
Listen to this article
6 min

South African Airways (SAA) might walk away with a windfall of at least R1-billion from the potential sale of a valuable landing slot at Heathrow Airport in London.

SAA wants to raise money by selling assets to fund its flight operations and expansion after a plan to introduce private-sector investors into its ownership structure collapsed.

Read more: SAA privatisation deal reaches the end of the runway, but fails to take off

The deal’s collapse means that investors will no longer inject R3-billion into SAA, leaving a hole in the airline’s financial books and no investors available to fund its expansion plans.

To free up fresh capital, SAA’s management and board are considering selling one of the two landing slots at Heathrow Airport, the rights of which are owned by the airline. SAA doesn’t use both landing slots because it no longer operates flights in and out of the UK but currently leases them to British Airways and Qatar Airways. The lease with Qatar Airways ends in March 2025, paving the way for SAA to sell the slot to another airline while retaining the one currently leased to British Airways.

No decision has been made on the sale, which would be subject to approval by Transport Minister Barbara Creecy, who oversees the governance affairs of SAA.

This is not the first time the sale of SAA’s landing slot at Heathrow Airport has been floated.

Daily Maverick understands that before the start of Covid lockdowns that grounded the aviation industry, the Department of Public Enterprises (DPE) commissioned a valuation of the slot and tested market appetite for it, with a view to starting a sale process. Before the end of the sixth administration the DPE oversaw the governance affairs of SAA. However, the airline is now overseen by the Department of Transport as part of the recently implemented ANC resolution to dissolve the DPE and for all state-owned entities to be housed in their line departments.

A source who worked at the DPE and was involved in SAA affairs told Daily Maverick that the airline’s landing slot at Heathrow was originally valued at R1-billion, according to the department’s valuation process, which took into account, among other things, recent slot sales at the airport.

“That valuation was conducted before 2020. That slot is now worth more than R1-billion as Heathrow is one of the world’s busiest airports. Global airlines want to land at the airport, grow their market share in the UK post-Covid lockdowns, and be able to compete,” said the source. “A second valuation could easily put SAA’s slot at nearly R2-billion.”
SAA growth plans

SAA interim board chairperson Derek Hanekom was not prepared to go into details about the valuation of SAA’s landing slot, saying only that it would be determined by a new valuation process.

“We need to test market appetite for the slot if we decide to sell it. There are early indications that other airlines are interested in buying the slot,” said Hanekom in an interview with Daily Maverick.

Qatar Airways, which currently leases the slot from SAA, would be the first airline to be allowed to buy the slot, also known as the right of first refusal.

The UK was a big market for SAA before the airline went through a business rescue process from December 2019 to April 2021. Before SAA entered business rescue it leased about 52 aircraft, flying more than 40 times a day on domestic, regional and international routes. The SAA of today is smaller, leasing 16 aircraft and flying about 20 times a day.

Hanekom said SAA does not have any immediate plans to operate at Heathrow because long-haul routes are expensive to run, competition is intense, and the airline is facing a capital crunch. “We are not in a position to compete with Virgin Atlantic or British Airways. We just don’t have the aircraft that would be required. We’d have to invest quite a lot of money, which we don’t have. Our approach is to hold off on expansion plans for a couple of years. When we are ready, we’ll go back to the London route,” Hanekom said.

Whether SAA’s landing slot at Heathrow is worth R1-billion or R2-billion, a successful sale would free up much-needed capital for the airline, which is still in financial distress. Since 2018, SAA has racked up financial losses of R28.9-billion and received bailouts of R48-billion from taxpayers. SAA last turned a profit in 2011. However, there are now talks of profits returning to the airline.

Read more: After the Bell: Is state-owned airline SAA really flying into profitability?

Hanekom said a smaller SAA will now focus on limited regional and international routes. SAA plans to reopen 11 routes including Mauritius, Australia’s Perth, Brazil’s São Paulo, theDemocratic Republic of Congo’s Lubumbashi, Tanzania’s Dar es Salaam and Kenya’s Nairobi. DM

[African Flyer]

SXD first commercial flights in years

[Joker11]

SXD first commercial flights in years

Great. Another A340-300 from SAA with an outdated cabin product.

I flew in from Frankfurt on Lufthansa's A340-300. You couldn't tell it was an old aircraft. Cabin was fresh and modern.

[JohnnyJet]

Top SA Journalist Quoted:
"Over the past two decades, the South African government has spent R49-billion on SAA in the form of bailouts and guarantees. That amount could have built half a million RDP houses."

[Volo]

Top SA Journalist Quoted:
"Over the past two decades, the South African government has spent R49-billion on SAA in the form of bailouts and guarantees. That amount could have built half a million RDP houses."

............................................................................

And then they have the Gall to claim they are Debt-free. - Got me reaching for a Paper Bag !!!!!!!!!!

[LASS 1190]

Top SA Journalist Quoted:
"Over the past two decades, the South African government has spent R49-billion on SAA in the form of bailouts and guarantees. That amount could have built half a million RDP houses."

............................................................................

And then they have the Gall to claim they are Debt-free. - Got me reaching for a Paper Bag !!!!!!!!!!

Volo, I posted this weekend that when I compared airfares with SAA and FlySafair as the options, that on the same route, same day with SAA being the more expensive option their VAT portion on the rate is 50% less than that charged by FlySafair. How is this even possible - SAA R 2122.69 and vat included R 111.00 ; FlySafair R 1911.44 and vat included R 231.37 - fair? I think not.