South African Airways has the potential to be a sound business but would benefit from having an industry-investment partner to improve its management, according to the bankrupt state carrier’s administrators.

“The issue with SAA has never been about the absence of a business but the management thereof,” Siviwe Dongwana, one of the business-rescue practitioners, said in written comments on Tuesday. A strategic-equity partner would help the airline become “sustainable and not require any further support from the fiscus,” he said.

The search for an aviation company to invest in SAA is at the heart of the latest plan to revive the airline, which was surviving on government support even before the onset of the Covid-19 pandemic brought a halt to all commercial flights in March. Ethiopian Airlines Group has regularly expressed interest in the company, though it is reluctant to commit financing and talks with the government have failed to lead to a deal.

SAA’s reliance on state-backed loan guarantees had enabled debt to rise sixfold to 12 billion rand ($782 million) between 2011 and 2019, said Dongwana, who was brought in when the airline was placed in bankruptcy protection almost a year ago. That was costing the company 1.3 billion rand in annual interest payments, he said.

Nine CEOs

At the same time, SAA has had nine permanent or acting chief executive officers over a 10-year period and was embroiled in various corruption scandals during the presidency of Jacob Zuma, which ended in 2018.

South African Finance Minister Tito Mboweni approved a bailout of about 10.5 billion rand in his October budget statement, a move that was heavily criticized given the economic devastation brought by the coronavirus pandemic and the funding needs of the country’s crucial national power utility.

“No strategic-equity partner wants to deal with legacy issues of SAA, nor any potential investee for that matter,” Dongwana said.

Still, SAA is potentially viable, he said.

“The airline has a good route network and is dominant in the African market,” he said. “SAA still has some very profitable landing slots at prime destinations, enabling it to compete with other international commercial airlines.”