Sunday, 9 February 2020

South African Airways route cuts are intended to make carrier sustainable

South African Airways’ (SAA) will see axes to its domestic and international route network in a drastic move to make the airline sustainable and eventually free from government funding that has rescued the failing carrier in recent years.

The State-owned SAA had entered bankruptcy protection in December, last week experts from the rescue team said the airline would cut flights to Durban, East London and Port Elizabeth from February 29th, as well as cutting some international routes, in an effort to conserve cash and potentially attract equity investment partners.

However, there is political opposition to the axing of services. South African President Cyril Ramaphosa said on Friday his government did not agree with plans to cut some of SAA’s domestic routes, which has plunged the airline into more uncertainty.

“We recognize the concerns raised, especially around the domestic routes. We will continue to engage with stakeholders, with a commitment to include inputs into the final business rescue plan, which is due to be published by the end of this month, “SAA business rescue practitioners Les Matuson and Siviwe Dongwana said in a statement.

The business rescue team is protected under South African company law, to execute actions it deems necessary to rescue the distressed airline, so it is, therefore, no obligated to comply with government wishes not to axe certain routes.

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