South African Airways denies operations cease on May 8 2020
Troubled South African Airways said it would continue repatriation and cargo flights at least throughout May. The airline was previously expected to cease all operations on May 8, 2020.
South African Airways (SAA) had no plans to cease operations on May 8, 2020, according to the airline’s statement issued on the day. “The airline will honour all existing commitments to provide air transportation services to its customers and any other requests that it receives.”
SAA stated it is working with both foreign and South Africa’s governments to organize repatriation flights and cargo operations. The airline claims it has “several” requests for repatriation flights across Africa, the Americas, the Middle East, Far East, and UK.
“As long as such requests are received, SAA will endeavour to fulfill them,” the company’s statement read.
On May 8, 2020, South Africa’s Labour Court ordered SAA administrations to stop employee layoffs. Layoffs were seen as a necessary step to avoid SAA liquidation by its business rescues, but condemned by unions. Administrators are expected to appeal the court’s ruling.
SAA has not made profit since 2011 and is heavily indebted. The carrier previously survived thanks to regular cash injections from the state, which amounted to over $1.1 billion over the past three years.
In December 2019, the airline entered bankruptcy protection. In January 2020, it secured 3.5 billion rands ($240 million) funding from investors, including the state-owned Development Bank of Southern Africa.
On May 1, 2020, the country’s government rejected another payout for SAA. Instead, public enterprises minister Pravin Gordhan revealed plans to create a new airline (dubbed SAA 2.0 in local media). “Stakeholders have agreed on a long-term vision and strategy” with a view to “the creation of a new dynamic airline,” Gordhan said.
The administrators are expected to draft the airline rescue plan by the end of May 2020.
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