The South African government has allocated another ZAR1 billion rand (USD55.1 million) to state-owned South African Airways (SA, Johannesburg O.R. Tambo) "to assist the carrier with its business rescue process", Finance Minister Enoch Godongwana announced during his 2023 budget speech in Parliament on February 22.

He gave no further details except that all "allocations for these state-owned companies (SOEs) will be accompanied by strict conditions to ensure sustainability, accountability and transparency. If the conditions are not met, the money will not flow".

ch-aviation found the ZAR1 billion allocation to SAA is recorded in the government's Second Adjustments Appropriations Bill for the Financial Year 2022/23, which says the funds will be used to purchase equity and to settle business rescue plan obligations.

The announcement comes as the sale of 51% of SAA to the government's preferred strategic equity partner, Takatso Consortium, is still pending almost three years since it was first announced. According to Treasury disclosures to a parliamentary oversight committee on February 17, two outstanding issues are holding up the deal: outstanding liabilities to concurrent creditors and unflown ticket liabilities. It stands to reason that the current bailout will be geared toward clearing these debts.

The announcement also came less than a week after Treasury told the parliamentary oversight committee that SAA was no longer technically insolvent and had a net equity value of ZAR1 billion rand on December 31, 2022. It also comes after Treasury, in the past, vowed not to provide any further state bailouts to SAA other than ZAR10.5 billion (USD576.8 million), - which effectively escalated to more than ZAR14 billion (USD769.1 million) - to implement its business rescue process. That bailout in 2020 was financed by reducing the funds allocated to other national departments and their entities and slashing provincial and local government conditional grants. Godongwana made no mention in his speech of where the current ZAR1 billion would come from. According to a 2020 Treasury document, SAA had incurred net losses of more than ZAR32 billion (USD1.7 billion) since 2008.

Continued pressure on the government to bail out struggling SOEs has placed strain on the fiscus, with the Treasury previously having flagged SOEs' expenditures as one of three main risks to the short- to medium-term fiscal outlook in South Africa. In particular, the state is heavily burdened by ZAR337 billion (USD18.5 billion) of debt it has guaranteed for national power supplier Eskom, plagued by rolling blackouts due to ageing power plants, vandalism and labour problems. Godongwana said the state would settle ZAR254 billion (USD13.9 billion) of Eskom's debt, meaning government debt would stabilise in 2023/26, three years later than anticipated.

The opposition Democratic Alliance (DA) party has slammed Treasury's budget announcements, both in terms of SAA and Eskom. "The Minister’s announcement of bailouts for failed state-owned enterprises including the Land Bank, Post Office, and SAA is a clear misallocation of public funds. However, this pales in comparison to the mother of all bailouts – the offloading of over ZAR250 billion (USD13.7 billion) of Eskom’s debt onto our sovereign balance sheet," it stated.