ADDIS ABABA – Ethiopian Airlines Group is among companies in talks with South Africa’s government about potentially offering support to the country’s insolvent state airline, Bloomberg News reported on Thursday.
Africa’s biggest carrier is considering ways to help bankrupt South African Airways fly again after more than five months of dormancy, the news outlet reported quoting people familiar with the matter.
Taking a stake in the carrier is one of the options under discussion, they said, though negotiations are ongoing and an agreement may not be reached.
South Africa needs to raise more than 10 billion rand ($595 million) to revive SAA, according to a rescue plan compiled by administrators and backed by both the state and labor groups.
Yet, its Finance Minister Tito Mboweni has said the funds should come from private sources, committing only to help “mobilize” the required amount. SAA was placed under administrative protection in December, before the coronavirus crisis hit.
Much of the funding is likely to come from private financial backers rather than Ethiopian, which would bring more operational expertise to the table, the people said.
Ethiopian Chief Executive Officer Tewolde GebreMariam said last year the state-owned carrier would be interested in buying a stake in SAA if approached.
South African officials said Ethiopian was “one of many” interested parties the government is in talks with.