President Cyril Ramaphosa on Friday said his government opposed South African Airways’ business rescue plans to close most of the national airline’s domestic routes and some international flights.
The cash-strapped flag carrier was placed under a state-approved turnaround plan in December following years of mismanagement and increasing debt.
Government-appointed independent business administrators have cancelled dozens of domestic and some international flights to streamline services and save cash in recent weeks.
This week they unexpectedly announced the airline would scrap all of its domestic routes apart from Johannesburg to Cape Town, as well as flights to nine international cities, including Hong Kong and Sao Paulo.
“We are not in agreement with what the rescue practitioners have come up with, that domestic flights should be cancelled,” Ramaphosa told reporters before boarding his presidential plane to Addis Ababa, Ethiopia, where he will take up chairmanship of the African Union.
“We want to find out what the rationale is and we want to have a discussion with them because SAA is not only a great symbol for the country but it is also an economic enabler, it enables people to move around the country and we would like SAA to remain a robust and successful airline.”
Like most South African state-owned enterprises (SOEs), the national airline has failed to make a profit for more than a decade, surviving on government bailouts.
The Public Enterprises Ministry said the administrators’ recent decisions had caused market and customer uncertainty that may jeopardise the long-term future of the airline.
“Government will be making representations to the business rescue practitioners in order to balance the necessity for trimming unprofitable routes with the need to ensure the future sustainability of both the airline and South Africa´s aviation industry,” the ministry said in a statement.
SAA employs more than 5,000 workers and is Africa’s second-largest airline after Ethiopian Airlines.
Several rival carriers and low-cost airlines, including SAA’s unit Mango, also offer domestic flights in South Africa. AFP
