SAA given bankruptcy protection as severe job cuts loom

Matheus Obst

The South African government will place South African Airways under bankruptcy protection to begin the profound restructuring of the airline.

SAA has been granted a $272 million bailout to keep the airline airborne for the coming months. Half of the money will come from the government, while the other half will be provided by private investors. However, this cash injection will be accompanied by deep cuts in the company’s operational charges.

Public Enterprises Minister Pravin Gordhan said he was convinced the move would help rebuild a stronger, more sustainable entity. “This is the optimal mechanism to restore confidence in SAA,” Gordhan said. An independent private company should be contracted to organize the restructuring.

The airline has failed to secure profit since 2011 and already received more than $2 billion in government funding. Earlier in the year, SAA was looking for a strategic partner in order to stabilize its financial situation – to no avail. The last governmental bailout to allow for normal operations was secured as recently as September 2019.

After looming for months, the beginning of restructuring was announced on November 11, 2019, when SAA revealed that it might lead to job losses for nearly a thousand employees out of its more than 5000-strong workforce. Since then, several unions including the South African Airways Cabin Crew Association (SACAA) and the National Union of Metalworkers of South Africa (NUMSA) have been on strike, forcing the airline to cancel all of their flights for seven days. The unions obtained a 5.9% wage increase, but the victory was short-lived as by the end of the month, SAA was unable to pay all salaries.


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