South African Airways ‘is on verge of bankruptcy’

South African Airways has run out of cash and is teetering on the edge of bankruptcy.

 

South African Airways have warned that it will face a liquidity crisis if it does not receive a 13 billion rand ($965 million) bailout from the Treasury.

 

According to media reports, the South African national carrier, who has reported losses in each of the past seven financial years, may soon not be able to pay salaries.

 

Speaking to the BBC, Alf Lees, the deputy finance spokesman of the opposition Democratic Alliance, said: “Essentially they are insolvent and should have filed for liquidation.

 

“We believe that the directors are in breach of the South Africa companies act by continuing to trade recklessly knowing that SAA will not be able to meet its financial commitments and without any guarantee that the shareholder (the South African government) will be prepared to continue to bail them out.”

 

The South African Treasury is considering the sale of state assets to fund the airline’s recapitalisation.