South African Airways in talks over funding for shake-up
By Tanisha Heiberg |Reuters|
South African Airways (SAA) and lenders have had “intense discussions” to secure funds for the cash-strapped carrier’s operational and structural transition, the country’s public enterprises ministry said on Sunday.
SAA, which hasn’t made a profit since 2011 and is dependent on government bailouts to remain solvent, was hit last month by a crippling strike that pushed it to the brink of collapse.
The department, headed by minister Pravin Gordhan, issued a statement saying that the struggling state-owned airline could not continue in its present form and would need a “radical restructuring” to ensure financial and operational sustainability.
“Over the past few days there have been intense discussions with lenders to secure the necessary funds to cover the operational and structural transition over the next few months,” the ministry said.
The ministry is pursuing various options to turn around SAA, it added without providing further detail.
SAA last month said it could cut more than 900 jobs as it looks to stem severe financial losses.
Its financial position worsened dramatically after Nov. 15, when two of its largest unions began an eight-day strike over pay that forced SAA to cancel hundreds of flights.
In another blow, two large travel insurers in South Africa on Friday stopped covering SAA tickets against insolvency as doubts grow over whether the airline can survive.