With the travel restrictions in place around the world as a result of the ongoing Coronavirus pandemic, South Africa’s largest airline could be liquidated with competitors eyeing to buy over what is left of the airline.
Just this week, stories came out that the Johannesburg-based carrier could crumble under due to the severe financial strain sustained as a result of the current crisis with plans to lay off all employees and liquidate the remaining profitable assets. Already in some financial distress, the airline was repeatedly bailed out as a result of emergency funds injected by the South African government.
For three years, the South African Government funded at least one billion USD. The future of airline plunged into uncertainty after the government decided not to offer further funds in April. In addition to the emergency cash already received, the airline had already begun selling nine of its long-range Airbus A340 aircraft.
With the pandemic being what looks like the final nail in the coffin for South African Airways, other South African carriers such as FlySafair, Airlink and Comair are actively seeking to take over some of the remaining profitable activities.
This could potentially offer some respite to the struggling airline by helping to finance a redundancy plan, however, there is no guarantee.
Speaking to The African Report, Sylvain Bosc, former deputy managing director of SAA explains the current grave situation the airline is in. “It would have taken a lot of money to get it back on its feet. And, if before COVID, we could count on a measurable flow of traffic, that’s no longer the case today. We don’t know how quickly business will pick up again, or even if it will return to pre-crisis levels. The company was already struggling before the pandemic. How could it do better afterward?”
South Africa’s flag carrier has already suspended its commercial operations, with flights being only limited to repatriation and cargo flights amid the COVID-19 pandemic.
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