South Africa’s flag carrier is on the brink of a financial collapse.
South African Airways claims it suffered a sudden spike in losses after a recent strike. If the airline cannot secure $135 million (2 billion Rands) in the next few days, they may have to file for liquidation.
The airline has already agreed to repay a debt of $624 million or 9.2 billion Rands over the next three years.
A member of SAA’s board says:
SAA competes in a cut-throat industry with razor-thin margins. There are 50 airlines serving South Africa.
So… good luck to the airline. They just took delivery of three beautiful A350s in a modified livery. Would be a shame to see them go.
Spoke to an SAA training captain for the A350 the other day, they’re seeking business rescue and are looking for offers from other airlines to potentially take ownership of them (eg, Etihad). They also had a vote of no confidence from the pilot committee towards the management, also, if all goes wrong, 1 or 2 of the A350’s will go back to Air Mauritius, they remaining to Airbus, and the A320’s will potentially be bought by charter airlines, the 340’s have reached the end of their days so theres no way they won’t land up somewhere such as Victorville.
Edit: Its also highly unlikely it will close, the Government has injected numerous amounts of loans into the for the past decade.
They rent the A350s from Hainan Airlines. A350 is too large for Hainan, and I doubt that it is the right amount of seat for South African Airlines, an airlines in severe financial crisis.
Everyone needs to realize that at the end of the day, you can’t say ‘please no no no’, if you do not understand how bad of a situation this is.
For the past decade SAA has been in major debt, and each time they’ve come close to closing, the government has injected funds and money into them, but guess who they got that money from? People like me (South African Citizens), now do you want your tax going towards something that is corrupt and not financially stable, or do you want it going towards something that could prove valuable to your country (eg, renewable energy, medical research)
Most people would pick the later option.
SAA is most likely going to be liquidated within the next week, as they have lost all functionality, this all started over a decade ago, but has reached its final stand in the past week, regarding the Cabin and ground staff strikes, which lead to them grounding 50% of all their flights, they have just lost their biggest ticket reseller (flightcentre), as they have cancelled all current and furthing bookings for SAA.
Not surprised. SAA’s been in the news everywhere for a long time, if they mark the end of the 2019 Age Of Collapse (year goes out with a bang, SAA) then I won’t be shocked at all. Maybe they will get a little save in the tourism season upcoming (winter break) but it won’t be enough.
