According to the former directors of South African Airways (SAA), the R5 billion guarantee given to them by government in October will only yield short-term benefits.

They feel that the airline needs a more permanent capital structure if they wish to avoid another financial crisis.

A large number of board members, including chairwoman Cheryl Carolus resigned this year prior to SAA’s annual general meeting. They were concerned at the lack of support from the Department of Public Enterprises, who are a shareholder of the airline.

Public Enterprises Minister Malusi Gigaba replaces other board members when their employment contracts expired.

Mr Gigaba had to inform Parliament that the tabling of the annual report would be delayed pending Treasury’s confirmation that it would agree to a R5bn guarantee over two years. This was necessary so that SAA’s financial statements could be presented on a going-concern basis.

“The directors are of the view that the financial support of its shareholder would be adequate for the going concern requirement in the short term being 12 months from the date of approving these annual financial statements,” they said in their report. “