South African Airways will go into provisional liquidation after a decision by the South African Court. The airline has been struggling for many years, but this will come to an end. As of now, the airline will cease operations, and the South African Government is designing a newer, more profitable carrier.
Photo by Ernest Leung | AeroNewsX
On Tuesday, April 28th, the South African High Court called out a provisional liquidation for South African Airways after the government refused to provide state aid. SAA was already under bankruptcy protection, and the carrier will no longer be South Africa's flag carrier. Unfortunately, all employees will lose their jobs. The government has not yet declared whether its low-cost subsidiary Mango will continue to operate.
At the beginning of this century, the airline was completely state-owned and one of the largest carriers on the African continent. In the last decade, however, mismanagement and fierce competition slowly damaged the airline. There has also been a corruption investigation going on about the carrier. In the last few years, the company has seen many CEO's, but none of them were able to make South African profitable.
South Africa has nearly 58 million residents and needs a profitable airline. According to the founder of ZA Logics, Ogaga Udjo, there is no other airline that could immediately take its place. The South African government has decided to form a new airline out of the unprofitable SAA. Ideally, the airline would have a mix of private and governmental ownership, as said by the Department of Public Enterprises. The government will source 2.2 billion Rand(117 million USD), and all former employees will have priority in getting a job at the new, hopefully, profitable national carrier.
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