"Government is committed
to working with SAA's management and board of directors to ensure that SAA is a
viable and a financially sustainable airline," the National Treasury and
Ministry of Public Enterprises said in a statement.
The airline will now have to
present a strategy to turn around business and prove it remains a going
concern.
The company's profits have been
hit by the rising cost of fuel and reduced passenger numbers, as the result of
the global financial downturn.
In 2011 the carrier reported an
increase in profit from 442 million rand ($53 million) in 2010 to 782 million
rand, boosted by the 2010 FIFA World Cup, but for the most part the airline has
struggled to make a profit.
The announcement comes just days
after the embattled state-backed carrier was plunged into crisis when its
chairwoman and seven board members resigned in protest.
Cheryl Carolus announced her
resignation through local media, saying that relations with the government --
the airline's sole shareholder -- had become untenable.
Carolus had objected to a delay
in publishing the airline's accounts for the last year.
Speculation is rife that the
firm will report a massive loss this year.
Earlier this year the airline
asked for a cash injection of up to six billion rand.
While the bailout falls
slightly short of that figure, it is only likely to fuel calls for the airline
to be privatised.
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