South African Express (EXY, Johannesburg O.R. Tambo) is set to once more go cap-in-hand to the South African treasury seeking emergency funds to shore up its financial position which South Africa's Minister of Public Enterprises, Lynne Brown, has described as "extremely difficult."
According to BusinessDay, Brown told parliament on Tuesday that urgent discussion between airline management and treasury were underway about the granting of a guarantee to allow it to continue its operations.
Fellow government-backed carrier, South African Airways (SA, Johannesburg O.R. Tambo), has also applied for a similar facility, she said. Earlier this year, Brown said SAA will likely require ZAR50billion (USD4.64billion) in private funding if it is to remain a going concern.
On both carriers' inability to publish their financial statements by the end of September as required by the Public Finance Management Act (PFMA), Brown claimed that SA Express had not been able to demonstrate it could operate on a going-concern basis without government support as required by PFMA. As a result, the carrier's annual report, financial statements and audit report could not be tabled by the end-September deadline, she said.
Concerning South African Airways, Brown said she had had to defer the tabling of the national carrier's results because the airline had not been able to submit its annual financial statements and integrated statement to her before end-August.
Both South African Express and SAA have persistently relied on the national fiscus to prop up their operations in the face of growing regional and international competition.
Despite generating combined cumulative losses of over ZAR25billion as of March 2013, Pretoria has rejected calls to privatize each on the grounds that they are strategic assets and therefore must be kept going at all costs.
