South African Airways
Taken by @aviationza
South African Airways was hoping to be bailed out by the South African Government to keep them above waters during these struggling times. However, they refused and denied any future funding for the flag carrier. They are pushing the airline to move towards profitability and look for alternative solutions and resources.
Since 2014, the airline has lost R26 billion rand ( approx. €1.27 billion Euro). The struggling carrier has received $1 billion dollars in the past three years and still continues to make losses. However, the airline insists that bailout is needed towards profitability.
The Minister of Public Enterprise, Pravin Ghordan said that he hopes that the airline can find sustainability from the news. He stated in Bloomberg that: “We are of the firm conviction that South Africa needs a viable and sustainable set of airlines. We must urgently determine the operating and business model for a rescued airline, with a sustainable financial model.”
The Government certainly will be held responsible for South African Airways external debts. However, it is the airline’s own responsibility to deal with their internal issues either through profitability and liquidation.
The airline recently reduced their flights and grounded a large amount of their fleet. They decided to leave their fuel heavy Airbus A340s in service and use these aircraft for many repatriation and other flights.The airline is currently leasing 5 Airbus A350s which are much more fuel efficient from Chinese conglomerate HNA Group. The airline is paying for these aircraft whether they are being used or not. However, they are continuing to use their costly Airbus A340s instead. This may be one of the reasons why the airline is creating losses.
South African Airways has decided to fire all 4700 members of their staff and offer them severance deals. Administrators have come to the conclusion that a turn around is highly unlikely and that they are looking into selling all of their assets to tackle these financial issues caused by this global pandemic.
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