Angolan state airline TAAG needs the government to approve a capital increase of US$952 million so that the carrier can pay down most of its accumulated liability in excess of US$1.063 billion, the chairman of the board said on Tuesday in Luanda.
José Kuvíndua, who was speaking at a seminar on communication and marketing harmonisation at the Ministry of Transport, where he presented the company’s strategic plan for 2018/2022, also said that the airline’s cash position could deteriorate further due to aircraft leasing payments, planned engine overhauls and machine maintenance, despite positive predictions of operating performance.
“This is why the timely receipt of the fuel subsidy and a new capital application is important to eliminate the deficit on the balance sheet due to losses recorded in previous years,” said the TAAG chairman quoted by state newspaper Jornal de Angola.
Kuvíndua called for applying a sum of between US$100 million and US$150 million over the next two years to improve working capital and facilitate the aircraft acquisition programme, granting of sovereign guarantees to the fleet renewal programme, providing foreign exchange to maintain services and provide passengers with basic services.
“The company needs to receive a minimum amount of US$ 10 million a month,” he said, adding that the shortage of foreign currency to meet regular expenses and the government’s inability to capitalise the airline to reduce past losses restricted management’s ability to make decisions to expand the business. (macauhub)