Ethiopian Airlines is in talks to help South African Airways to return to the skies after five months of dormancy. Part of the negotiations includes taking a stake in the airline. However, discussions are still underway.
Bloomberg reports that Ethiopian Airlines is one of the companies which the South African government is in talks with. So far, the government has received ten expressions of interests from private sector investors, partners and equity investors. The proposals include those relating to the airline and its subsidiary Mango, as well as its catering and maintenance units. Department of Public Enterprises Director-General Kgathatso Tlhakudi says four out of the ten offers look promising.
Emirates and Ethiopian Airlines are also discussing a codeshare agreement with the South African carrier.
A rescue plan by the government and labour groups says that South African Airways needs to raise 10 billion rands ($595 million). 2.8 billion rands will be used to bring back its planes to the sky while 3 billion rands will go to ticket refunds. 1.7 billion rands will pay plane leasing companies while 2.2 billion rands will finance voluntary packages as the airline cuts its staff from 4,800 to 1,000. Finance Minister Tito Mboweni insists that the airline needs to raise funds from private sources, with the government only facilitating mobilization.
South African Airways last made a profit in 2011.
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