Is South African Airways on the brink of collapse?

January 21, 2020

 

Source MARCEL VAN LEEUWEN via aviationnews.eu 



Thousands of passengers on South African Airways (SAA) have had their flights cancelled as the troubled airline appears close to failure.

At least a dozen flights to and from the SAA hub in Johannesburg have been grounded.

The cancelled departures include the Monday evening flight to Munich, and the Tuesday return from the German city. The loss of the latter flight will trigger payments of €600 to each passenger under European air passengers’ rights rules.

Ten flights to and from Durban and six links with Cape Town have been axed. In addition, some SA Express services have been grounded. These have SAA flight numbers but are operated by a separate carrier.

Further cancellations are planned for Tuesday.

Reports in South African media say that the government will refuse to continue to subsidise the prodigious losses of SAA.

The low-cost subsidiary, Mango, would continue to fly domestic services.

The carrier has lost 30bn rand (£1.6bn) over the past 13 years.

SAA has not published its financial results since 2017, when it lost the equivalent of £145m – about £15 for every passenger flown.

At the time it said one strategic objective was to “achieve and maintain” commercial sustainability.

Despite the cancellations, the airline said it “wishes to assure its customers and stakeholders that flights to all its destinations continue as normal”.

A statement insisted: “Where there may be flight schedule amendments, such operational changes will be managed and communicated in accordance with the industry norms and practices.”

SAA’s previous chief executive, Vuyani Jarana, had vowed to transform the airline’s fortunes. He promised to “break the loss-making cycle and transform the airline into a viable and sustainable entity”.

But he resigned in June 2019, saying his strategy was being “systematically undermined”.

Mr Jarana was replaced by Zukisa Ramasia as acting CEO. Her appointment was criticised by the SAA pilots’ union, which said the move was a cause for “profound distress and concern”.

In November 2019, at least 40,000 passengers had their travel plans wrecked by a two-day strike over pay and conditions by flight crew and ground staff.

SAA has recently bought state-of-the-art Airbus A350 jets for intercontinental services.

Last week the airline put nine of its long-haul aircraft fleet up for sale. But the Airbus A340 aircraft are unlikely to attract many buyers since the four-engined jets are much less efficient than modern planes.

Were SAA to fail, it would increase demand on the current British Airways and Virgin Atlantic flights from Heathrow to both Johannesburg and Cape Town.

SAA has reduced its London operators to a single Heathrow-Johannesburg flight. 

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