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June 25, 2018

SA treasury plans $760 million bailout for struggling state airline

Passengers board a South African Airways Boeing 737 aircraft at the Kamuzu International Airport in Lilongwe October 25, 2009. /REUTERS
Passengers board a South African Airways Boeing 737 aircraft at the Kamuzu International Airport in Lilongwe October 25, 2009. /REUTERS

South Africa plans to table a special appropriation bill to parliament in the next month to request a 10 billion rand ($762 million) bailout for the struggling state airline, treasury's top official said on Wednesday.

South African Airways, which runs one of Africa’s biggest fleets but is loss-making, is seeking a 13 billion rand bailout from government to pay off debts and keep its planes in the air.

SAA said on Wednesday five narrow-body aircraft would be retired from its fleet by December, causing an overall flights reduction of 23 per cent, in a bid to return to profitability.

"One narrow-body aircraft has left the fleet, with four more expected to leave the fleet by December 2017,” a presentation to legislators said.

The airline runs one of Africa’s biggest fleets but is loss-making. It received state funds in July to help to repay debts and also depends on government debt guarantees of about 20 billion rand

($1.5 billion). ($1 = 13.0415 rand)

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