South Africa: Administrators Rule Out Mid-June Return for SAA Flights

The business rescue practitioners for South African Airways (SAA) on Wednesday rejected an "unvetted" statement released by the state-owned airline indicating plans to resume domestic flights from mid-June.

The national carrier had on Tuesday said that its planes would be back in the skies between Johannesburg and Cape Town.

But Les Matuson and Siviwe Dongwana, the business rescue administrators, said SAA had breached communications protocol by issuing a statement which "created an unfair expectation on our relevant stakeholders, including SAA's customers, as well as employees who are on unpaid absence as a result of the travel ban which led to the halting of the company's operations and compounded its financial distress."

SAA's media statement had gone out without the approval of the practitioners as demanded by the business rescue procedure.

With the government of South Africa having announced that the country will enter into lockdown alert level 3 from June 1, domestic air travel will be permitted but only for business purposes.

The business rescue practitioners said SAA planes will remain grounded until a better understanding of what the level 3 regulations entail.

"The SAA statement was released in violation of the BRPs communications protocol which was put in place so that unvetted releases are not issued. The position around the cessation of flights remains as is until SAA has a better sense of what the level 3 lockdown means in terms of domestic air travel. The airline also needs to consider what the opening of the skies will mean from a commercial and load factor perspective. SAA's future funding also remains a key variable in all of the above considerations," a statement by the business rescue practitioners says.

SAA was placed under business rescue, a bankruptcy protection process, in December 2019 to save the cash-strapped airline from collapse.

This was after government bailout efforts of over R30 billion ($1.7 billion) in the last seven years could not sustain the national carrier which is teetering on the brink of bankruptcy.

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