South African Airways (SAA) faces a wind-down or liquidation after specialists appointed to try to save the state-owned airline said on Thursday they had run out of funds.
SAA has been fighting for its survival since it entered a form of bankruptcy protection in December. Its fortunes deteriorated further when the coronavirus pandemic forced it to suspend all commercial flights.
It has already offered severance packages to its workforce of roughly 5,000 people after the government said it would not provide more funds for rescue efforts.
Business rescue specialists Les Matuson and Siviwe Dongwana said in a notice to affected parties that a wind-down process depended on staff accepting the termination of their employment.
Otherwise, the specialists “will have to make an urgent application for an order discontinuing the business rescue proceedings and placing SAA into liquidation,” the notice said. “The practitioners do not have sufficient funds available to continue honouring the obligations of SAA to its employees beyond 30 April,” it added.
South Africa’s state enterprises ministry reiterated this week it wanted a financially viable and competitive airline to emerge from SAA’s rescue process.
SAA has not been profitable since 2011 and has received more than 20 billion rand ($1.1 billion) in bailouts in the past three years, a drain on public resources at a time of weak economic growth.