South African Airways (SAA) and lenders had “intense discussions” to secure funds for the cash-strapped carrier’s operational and structural transition, the country’s public enterprises ministry said.
SAA, which hasn’t made a profit since 2011 and is dependent on government bailouts to remain solvent, was hit by a crippling strike pushing it to the brink of collapse last month.
The department, headed by Minister Pravin Gordhan, issued a statement saying the struggling state-owned airline could not continue in its present form and would need “radical restructuring” to ensure financial and operational sustainability.
“Over the past few days there have been intense discussions with lenders to secure the necessary funds to cover the operational and structural transition over the next few months,” the ministry said.
The ministry is pursuing options to turn SAA around, it added without providing detail.
SAA last month said it could cut more than 900 jobs as it looks to stem severe financial losses.
Its financial position worsened dramatically after November 15, when two of its largest unions began an eight-day strike over pay forcing the airline to cancel hundreds of flights.
In another blow, two major travel insurers in South Africa stopped covering SAA tickets against insolvency as doubts grow the airline’s survival.