S African national airline to stay in state hands: ANC

Johannesburg, Jan 22 (AFP) South Africa's ruling party on Wednesday said its cash-strapped national airline would remain in state hands, after about a dozen flights were scrubbed this week. South African Airways (SAA) almost collapsed last year after thousands of workers staged a week-long strike over low pay.

The debt-ridden airline received an emergency state-approved rescue plan in December and has been waiting for a two-billion-rand ($138-million) payout from the Treasury. Like most South African state-owned enterprises (SOEs), it has run a deficit for years and survives thanks to government bailouts.

"SAA should be retained as a national airline, which will require substantial restructuring," the African National Congress (ANC) said in statement. On Tuesday, SAA said it would drop 10 domestic and one international flight to "conserve cash".

The carrier also warned there might be further flight schedule changes in the coming days. SAA is Africa's second largest airline after Ethiopian Airlines. It employs more than 5,000 workers and operates a fleet of more than 50 aircraft.

"SOEs need to be stabilized and restructured in order to be able to effectively contribute towards economic growth," the ANC said. Finance Minister Tito Mboweni nonetheless told journalists last week the government was still seeking a financial solution for the airline. (AFP) AMS

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