The South African Government has abandoned plans to sell a stake in its flag carrier airline, South Africa Airways (SAA), after discussions with a prospective buyer fell through. 

The country’s Department of Public Enterprises (DPE) confirmed that the three-year long negotiations on divesting a 51% stake in the airline to Takatso Consortium had been terminated after both parties failed to agree on a revised transaction structure. 

The DPE confirmed that it had taken the decision to revert SAA to 100% state ownership and informed the board of the company to create a corporate plan for the future of the airline, including a bigger fleet and more routes. 

Public Enterprises Minister Pravin Gordhan told reporters: “We are convinced that SAA can sustain itself in the next year to 18 months, and that there are various other ways in which immediate financing can be obtained. But at no stage will SAA get money from the fiscus.” 

SAA, which was once the biggest airline in Africa, had been on the verge of liquidation when talks to sell a stake in the business began, with a valuation of its assets at the time, during the COVID-19 pandemic, placing them at R2.4bn ($129m). 

However, thanks to the boost seen in the aviation market as restrictions eased, a second valuation saw the airline’s assets valued at R5.5bn and the business valued at R1bn, leading to a renegotiation of terms that saw Takatso decide the deal was no longer in its shareholder’s interest, despite the acquisition receiving approval from South Africa’s competition authority in July 2023. 

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The DPE said that a “new form of raising finances” would now be explored for SAA with financial institutions and confirmed it would brief the airline’s staff as the company “enters a new chapter of its life”.