South African Airways (SAA), which entered a form of bankruptcy protection in December, will scale back some of its domestic and international routes from the end of February, specialists appointed to try to rescue the airline said on Thursday.
State-owned SAA will also seek to deploy more fuel-efficient aircraft, renegotiate contracts with suppliers, reduce the number of its employees and consider asset sales as part of rescue efforts, the specialists said in a statement.
SAA is among several South African state entities, including power company Eskom, that are mired in financial crisis after nearly a decade of mismanagement.
International routes to be closed from Feb. 29 include Johannesburg to Abidjan via Accra, Entebbe, Guangzhou, Hong Kong, Livingston, Luanda, Munich, Ndola and São Paulo.
The airline will continue to serve Cape Town on a reduced basis but will cease operations to domestic destinations including Durban, East London and Port Elizabeth from Feb. 29, the statement said.
“The initiatives we are taking now will strengthen SAA’s business,” business rescue practitioners Les Matuson and Siviwe Dongwana said.
“The decisions and actions announced today are aimed at improving SAA’s balance sheet, creating a platform for a strong and sustainable airline and ensuring that the company is more attractive for potential strategic equity partners.”
State companies’ financial problems are seen as one of the biggest threats to Africa’s most industrialised economy and have helped to push the country’s credit rating to the brink of “junk” status.
Source: Reuters
