South Africa Airways sells 51% Stake to Private Equity Firm
South Africa has agreed to sell a majority stake in the country’s grounded national carrier South Africa airways, to a local jet-leasing company and private equity firm, ridding the government of an entity that has long been a drain on state finances.
“The agreement is comprised of Johannesburg-based Global Airways, which owns recently launched domestic airline Lift, and private-equity firm Harith General Partners will take a 51% shareholding in South Africa Airways. The government will retain a minority stake.” Pravin Gordhan Minister of Public Enterprises
The sale of South Africa Airways comes about six weeks after the airline emerged from lengthy bankruptcy proceedings, having reduced its workforce by almost 80% and cut liabilities. The carrier has been the beneficiary of numerous bailouts and government debt guarantees over the years. Last year Finance Minister Tito Mboweni reluctantly allocated 10.5 billion rands from the state to help it stay afloat.
The airline has also been facing a sharp decline in international flights as South Africa remains cut off from much of the world due to pandemic travel restrictions.
However, the government has expressed optimism in the partnership, saying it will enable South Africa airways to achieve the objective of being a sustainable national airline.
“With this partnership, we believe we are closer to achieving the important objective of having a sustainable national airline. The new SAA “will be agile enough to cope with the current uncertainty, and improvement, in global travel.” Pravin Gordhan Minister of Public Enterprises
Global Airways started operations in 2001, with the objective to offer fully crewed, maintained and insured aircraft (ACMI) of the highest standard in the most cost-effective manner. The airline has operated on 4 of the 6 habitable continents.
The airline started Lift in December last year under Novick, a former head of Comair Ltd., which operates the South African low-cost airline Kulula. Harith invests in infrastructure across Africa and is the co-owner of Lanseria Airport northwest of Johannesburg.