South Africa Airways Airbus A340
Taken by Matthew @aviation.sa on IG
On the 1st of May, South Africa's Department of Public Enterprises have officially announced that they are to get a new national carrier. This is in hope to have a competitive and financially stable airline to operate for the country.
South African Airways is currently on the brink of liquidity so a new airline would replace the current struggling carrier belonging to state-owned airline. The ideal replacement for the airline would include both private and public sectors. This means that the airline can remain profitable through vital airlift capacity and trade connections. The airline has been trying to be saved since December by their business rescue team. However, these plans have been severely disrupted by the Coronavirus.
There is plans to restructure the airline. There are hopes that it will have a solid corporate structure which will be led by experienced management. They are expected to compete in a world where demand will be less after it previously was after COVID-19.
South African Airways has been around since 1934. Where did they go wrong? It has been seven years since the airline made a profit. Therefore, the COVID-19 pandemic pushed them over the edge entirely.
They tried to fight this pandemic by organising a recovery plan led by Les Matuson and Siviwe Dongwana. The South African government refused to provide a bailout package to the airline last month which caused SAA to start liquidating the airline. All employees were asked to agree to severance packages. Unfortunately, the airline has had $1.4 billion in losses over the last six years and have been relying on bailouts by the South African government to remain in service. At the moment, there are several private South African operators who want to take over a few of SAA's profitable activities. These operators are Comair, FlySafari and Airlink.
Many would say that SAA caused their own demise by doing many things that were simply unprofitable. This includes using their Airbus A340's over their leased Airbus A350s during this struggling time. However, since the airline was already going downhill before the virus, this pandemic may have actually saved them! Hopefully this new proposed plan and a newly restructured SAA will get the airline back up and running again.
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