South African Airways (SAA) has struck an agreement in principle with lenders to roll over 9.2 billion rand (Dh2.35bn) in debt that was due at the end of March, giving the loss-making state carrier more time to implement a turnaround plan and fix its finances.
Discussions with the airline’s lenders are ongoing to extend the maturities of its debt, subject to certain conditions, Vuyani Jarana, chief executive of SAA, told reporters at the CAPA aviation summit in Dubai on Tuesday.
“It’s an ongoing process,” he said.
SAA has not made a profit since 2011 and has relied on government bailouts for survival. The ailing airline set a five-year turnaround plan to cut costs and cancel unprofitable routes. Under the turnaround plan the company is targeting a return to profitability by 2021.
That objective is subject to oil prices staying below $70 a barrel on average, Mr Jarana said.
The airline is also seeking advisers to evaluate the business case of selling the catering unit, Air Chefs, as part of plans to offload non-core assets, Mr Jarana said. The turnaround plan will also include evolving its low-cost carrier Mango into a hybrid rather than a pure low-cost airline.
“It’s a very important unit because it’s a profitable unit. If you look at the market trends in the domestic market there’s more growth in the low-cost services which makes Mango very, very critical for SAA,” he said. It added four additional aircraft into Mango this year to increase its capacity to meet this demand.
After contracting out 122 of its pilots last year to other airlines, SAA is working to contain the extent of job losses, Mr Jarana said.
“So far we’re focusing on business transformation, taking out costs in the supply chain and the big thing for us is to make sure we minimise job losses,” he said. “As against job losses, we’re looking for other instruments to soften the blow.”
The airline does not expect to slash routes this year and is seeking opportunities to grow its network particularly within Africa, Asia-Pacific and the US, he said.
How to invest in gold
Investors can tap into the gold price by purchasing physical jewellery, coins and even gold bars, but these need to be stored safely and possibly insured.
A cheaper and more straightforward way to benefit from gold price growth is to buy an exchange-traded fund (ETF).
Most advisers suggest sticking to “physical” ETFs. These hold actual gold bullion, bars and coins in a vault on investors’ behalf. Others do not hold gold but use derivatives to track the price instead, adding an extra layer of risk. The two biggest physical gold ETFs are SPDR Gold Trust and iShares Gold Trust.
Another way to invest in gold’s success is to buy gold mining stocks, but Mr Gravier says this brings added risks and can be more volatile. “They have a serious downside potential should the price consolidate.”
Mr Kyprianou says gold and gold miners are two different asset classes. “One is a commodity and the other is a company stock, which means they behave differently.”
Mining companies are a business, susceptible to other market forces, such as worker availability, health and safety, strikes, debt levels, and so on. “These have nothing to do with gold at all. It means that some companies will survive, others won’t.”
By contrast, when gold is mined, it just sits in a vault. “It doesn’t even rust, which means it retains its value,” Mr Kyprianou says.
You may already have exposure to gold miners in your portfolio, say, through an international ETF or actively managed mutual fund.
You could spread this risk with an actively managed fund that invests in a spread of gold miners, with the best known being BlackRock Gold & General. It is up an incredible 55 per cent over the past year, and 240 per cent over five years. As always, past performance is no guide to the future.
FIXTURES
All times UAE ( 4 GMT)
Friday
Saint-Etienne v Montpellier (10.45pm)
Saturday
Monaco v Caen (7pm)
Amiens v Bordeaux (10pm)
Angers v Toulouse (10pm)
Metz v Dijon (10pm)
Nantes v Guingamp (10pm)
Rennes v Lille (10pm)
Sunday
Nice v Strasbourg (5pm)
Troyes v Lyon (7pm)
Marseille v Paris Saint-Germain (11pm)
COMPANY%20PROFILE
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Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Fixtures
Wednesday January 8 –Oman v Namibia
Thursday January 9 – Oman v UAE
Saturday January 11 – UAE v Namibia
Sunday January 12 – Oman v Namibia
Company%20profile
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