South Africa: Desperation Time for SAA

A South African Airways Airbus landing at Munich Airport in 2015.
analysis

In a desperate move to stop South African Airlines snowballing into bankruptcy, the Public Enterprises department has endorsed 'radical restructuring' at SAA and blamed trade unions for 'immense damage' to the reputation and finances of the stuttering organisation.

The Department of Public Enterprises' efforts to save SAA have been dramatically set back over the past week as corporate South Africa has begun to pull back from supplying some crucial ancillary services.

Last week, short-term insurance company Sanlam said it would stop selling ticket insurance on SAA bookings. Almost simultaneously, travel agents Flight Centre, one of SA largest, said it would stop selling SAA tickets. Other private companies that do business with SAA are making similar decisions.

These moves and others reflect frustration with mixed messages from the government, which seems to be in two minds about how, or even whether, to save the airline.

The Public Enterprises' statement on Sunday night sought to assure the public that government and SAA were seized of the issue, saying over the past few days there have been intense discussions with lenders to secure the necessary funds "to cover the operational and structural transition over the next few months".

The comment suggests lenders are...

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