Omanghana
The South African government has formally reopened the search for a private strategic equity partner for South African Airways, nearly two years after abandoning an earlier agreement with the Takatso Consortium.
The new process is intended to attract private capital, aviation expertise and operational support to strengthen the national carrier’s long-term financial position.
The government is seeking an investor capable of supporting aircraft acquisition, expanding SAA’s route network and improving operational efficiency without placing additional pressure on public finances.
In 2021, the government selected the Takatso Consortium as its preferred strategic partner for the airline. The consortium, comprising Harith General Partners and Global Aviation, proposed investing more than R3 billion in exchange for a 51% controlling stake in SAA.
The proposed transaction was expected to reduce the airline’s dependence on state funding while giving the private partner considerable responsibility for its commercial operations.
However, the deal was cancelled in March 2024 after almost three years of negotiations.
The termination followed disagreements over SAA’s revised valuation and unresolved questions concerning the balance between continued state oversight and the private investor’s authority over operational decisions.
Under the renewed search, the government will prioritize investors with sufficient financial capacity and extensive experience in the aviation industry.
The successful partner is expected to help strengthen SAA’s balance sheet and facilitate the leasing or purchase of modern aircraft.
Additional fleet capacity would allow the airline to expand its domestic and regional services while rebuilding selected international long-haul routes.
SAA is entering the latest investment process in a leaner and more stable condition than it was when it entered business rescue in 2019.
The airline recorded its first operating profit in more than a decade during the 2022/23 financial year and has continued operating without immediately seeking additional state guarantees.
Despite the improvement, private investment is considered essential to support future growth and enable the carrier to compete more effectively with other airlines operating across Africa and on international routes.
Cabinet is expected to provide further details on the proposed ownership structure, including the percentage of equity that will be offered to the successful investor.
The government is also expected to establish an official valuation method and minimum capital requirements for prospective partners.
These conditions are intended to ensure a transparent procurement process while protecting South Africa’s strategic interests in the national airline.
The renewed search represents another attempt by the government to secure SAA’s future through private-sector participation while limiting the financial risk carried by taxpayers.
Source: Omanghana
