South Africa Airways Releases Press Release Amidst Collapse Rumours
South Africa Airways released a press release today announcing that all operations are continuing to operate as normal. The announcement follows recent industrial action by its workers over wages and job cuts.
Reuters reported on Saturday that South African Airways (SAA) has nearly no cash left and may miss salary payments this month, citing comments made by a board member on Wednesday, and that a crippling six-day strike had pushed the state-owned airline to the brink of financial collapse.
The annoucement by SAA read as follows:
South African Airways (SAA) wishes to assure its customers and stakeholders that flights to all its destinations continue as normal.
The airline is aware of media reports suggesting that it will cease operations. SAA is always committed to transparently communicate with all stakeholders, including customers, about any material or significant operational changes that may have an impact on flight schedules.
Where there may be flight schedule amendments, such operational changes will be managed and communicated in accordance with the industry norms and practices.
Reuters said that the standoff between SAA and two of its largest unions over wages and job cuts is a critical test of President Cyril Ramaphosa’s pledge to fix ailing state firms, which play a large role in Africa’s most industrialized economy.
But the government has few easy options to rescue SAA. The airline has received more than 20 billion rand ($1.35 billion) in bailouts over the past three years and is hobbled by an unprofitable route network and a fleet of inefficient planes.
Officials have said they want to stabilize SAA before selling an equity stake so that they can get a better price.
But the rapidity of SAA’s financial slide and ballooning state budget deficits mean the government’s commitment to salvaging the airline is being sorely tested.
