07 August, 2017

Is it the end for SAA?

Could we be about to witness the end of one of the worlds most colourful airlines, South African Airways?  

The national airline of South Africa has been in financial trouble for at least the last five years and now it looks closer to collapse than it ever has before.

According to documents provided to parliament, the Johannesburg based airline is very nearly out of cash and is hovering on the brink of bankruptcy. The airline is struggling hard to even find enough money to page its beleaguered workforce. 

The papers indicate SAA is going to need vast loans from the government during the next two months if it is to survive. This is in addition to the airlines request to the national treasury for capital of more than $500 million. 

The documents were released just a few hours before a new CEO for the airline was announced, Vuyani Jarana is the new man at the top and already has a reputation for saving struggling firms including Vodacom Business Africa.

Jarana's appointment is just the first step on a long road to turn the failing airline around. Plans from the board have already been considered including a cut f loss making routes, reducing costs dramatically,  launching new key high yield routes as it battle to keep its 54 strong fleet flying.
However the key to securing success for SAA will be to route out the corruption that according to a recent report by Ernst & Young is endemic and the airline is effectively being looted from within.  The report indicates that billions has been lost by the airline through rampant mismanagement, corruption and fraud.  Another major issue to be addressed is employee relations, whilst flight crews have received generous pay deals, cabin crew, ground staff and maintenance personnel have not seen any sort of pay increase or bonus.

Whether the South African government will continue to pump billions into the failing airline or lets it go under remains to be seen, either way there are very uncertain times ahead for SAA and its passengers