South African Airways will soon be summoned by regulators next month to disclose details concerning talks with potential equity partners. This is to ensure that there is an assurance that none of the deals will violate foreign ownership laws.
According to the Air Services Licensing Act of 1990, airlines must be at least three quarter owned by South Africans in order to operate a domestic service. The reason being that international operators are not allowed to buy more than 25% stake unless proven otherwise.
Mr Tito Mboweni had announced earlier last month that the government was in talks with potential investors in South Africa Airways. The airline is currently reliant on bailouts and other forms of state support in order for the airline to survive. Some of the potential investors interested in buying a stake of SAA include Ethiopian Airlines and Virgin Atlantic Airways.
South Africa’s Public Enterprises Minister, Pravin Gordhan, told Bloomberg that the company will need to remove unnecessary costs. This will therefore be a move to attract viable buyers.
The airline is currently on some ongoing battles with the trade unions. It had previously announced that it was seeking on laying off some of the employees.
South African Airways is the state-owned flag carrier of South Africa. Its headquarters are in Airways Park at O.R Tambo International Airport. The airline links over 40 local and international destinations across Africa, Asia, Europe, North America, South America, and Oceania. Its base is at Johannesburg International Airport.