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South Africa Advised To Seek Help From Ethiopia To Save It's Airline

South Africa Advised To Seek Help From Ethiopia To Save It’s Airline

The South African Airlines was recently told to seek partnership with Ethiopian Airlines Group in order to save their own.

African Aviation Services Ltd prepared the assessment dated October 4th. They then presented it to a group of African National Congress lawmakers on Monday. This information came from an ANC official who kept his identity secret because this information isn’t public.

The South African Airways went into administration in December and now needs over 10 billion rand ($603 million) to restart. The airline has no registered profit since 2011 and has been surviving on government bailouts.

‘’There is inherent value in an existing airline which cannot be easily replicated in a new replacement carrier,’’ CEO of African Aviation Nick Fadugba wrote in a document.

The way forward;

They concluded that the preferred strategic equity partner for SAA is Ethiopian Airlines. Ethiopian Airlines shares a similar ‘pan-African vision’ to SAA and is Africa’s strongest carrier.

A spokesperson for Ethiopian Airlines said on Tuesday the airline has ‘no official report’ on the study. It is, however, willing to provide planes, pilots, and maintenance services to SAA. But it doesn’t want to assist with paying off SAA’s debts and meeting the costs of cutting its workforce.

Fadugba wrote saying the South African government should take over SAA’s debts and not encumber a new partnership with it. Without investors, the airline will fail.

There is inherent value in an existing airline which cannot be easily replicated in a new replacement carrier,” Nick Fadugba, the chief executive officer of African Aviation and the author of the study, wrote in the document. “After a thorough analysis, our preferred strategic equity partner for SAA is Ethiopian Airlines.”

‘’Without a strategic partner, all ongoing restructuring efforts are akin to once again rearranging the deck chairs on the Titanic,’’ Fadugba said.

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