Ethiopian Airlines Eyeing Stake In Ailing South African Airways
Ethiopian Airlines has expressed interest in acquiring stake in cash-strapped South African Airways should South Africa opt to sell equity in the ailing state carrier.
Group Chief Executive Officer of Ethiopian Airlines Tewolde Gebre Mariam said African National Congress (ANC), South Africa’s governing political party has frequently mentioned that it would consider selling equity in the airline adding that there is no visible strategy for such a plan.
“We are interested in supporting South African Airways,” he said in an interview at Ethiopian’s head office near Addis Ababa airport adding that “we would consider it” in the event South Africa asks Ethiopian Airlines to acquire a stake.
SAA which is the state-owned flag carrier of South Africa has not been making profits since 2011 and has been dependent on government bailouts to remain afloat. But owed to the extent of its financial difficulties, the bailouts have not helped to rebuild the airline back to its feet.
Hardly two weeks ago, SAA announced plans to have some of its assets sold to private companies, a decision which was reached by ANC during its national executive committee (NEC) meeting.
The debt-ridden airline decided to sell off a portion of its assets after it was denied bank loans even as its debts continue to spiral.
ANC made known that it is looking at international airline carriers to buy a portion of the debt-ridden airline.
Reliable reports earlier indicated that there were talks to sell the whole of SAA but the negotiations were later quashed on grounds that no one would be interested to buy the airline given the poor financial state.
The crippled financial and operational situation of SAA and other state-owned enterprises is weighing on the economy and continues to pose a huge threat to the Southern African country’s economic prospects.
Ethiopian Airlines has evolved and established itself as the sovereign jewel of African carriers. The airline is currently not just the largest carrier on the continent but also the fastest growing.
Featured Image Courtesy: The Verge
