SAA to draw its final breath as entire staff set to be laid-off

Adam Moreira, Wikimedia Commons (Airbus A350-900XWB)

According to a document obtained by Bloomberg on the current state of South African Airways, the airline has revealed that it will be laying off nearly 5000 of its employees by the end of April which in turn may relinquish its position as South Africa’s state carrier.

The 86-year old airline has been a beacon in southern Africa, operating both regional and international flights, but this came at the cost of several bailouts and government funded agreements throughout the years of which the last attempt at receiving funding to keep the carrier afloat was recently denied by its government due to many factors, one of which points out that the carrier last recorded consistent profits in 2011. The International Air Transport Association has predicted an industry loss of $314 Billion in ticket sales for 2020 as travel restrictions and state lockdowns have impaired the air travel market during this current period. All factors playing against the survival of the carrier.

The compensation packages

To accommodate the costs that will come with compensating its work force, the document obtained by Bloomberg revealed severance packages offered to its staff funded by the sale of the carrier’s assets. Although no final agreements have been concluded as the state’s departments are in discussion over alternate routes for the carrier and its staff, the employee compensation plan includes a one-week pay for each year served under the carrier and this is dependent on the success of the carrier’s asset sales which includes a portfolio of real estate, aircraft and London Heathrow slots which stand as an attractive asset as they are difficult to come by.

Although the carrier was valiantly operating cargo flights to bring in medical supplies from China to combat the global threat, the coronavirus may potentially stand as the final blow for South African Airways as it was already struggling with its restructuring before the outbreak. The exit of the carrier from the market could possibly leave room for competing airlines like Comair and Ethiopian Airways to increase their market share in the region and on the continent. This would potentially open new routes for African travel and fill in the demand held by the airline, but soon South Africa may see its skies absent of its once renowned flag carrier.

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