The flag carrier of South Africa, South African Airways (SAA), has been through a lot in recent years. However, 2020 is set to be the airline’s most transformative year as it makes its way through a significant restructuring process with business rescue practitioners with a bailout from the South African government. Let’s take a look at the latest news concerning this struggling airline.
At the end of October, Simple Flying reported that the South African government agreed to a large bailout package for the airline. According to The Africa Report, the airline is still awaiting these funds, which was set to be R10.5bn ($686m). Apparently, this money is scheduled to be transferred to SAA’s business rescue practitioners (BRPs) in January 2021. Meanwhile, the deficit continues to deepen as the airline’s employees continue to be on the payroll. Meanwhile, according to Planespotters.net, 12 aircraft are listed as part of the airline’s fleet, and they are all marked as parked. These planes include three Airbus A319s, eight A340s, and a single A330.
South African government commits to keeping the airline alive
South African media outlet Business Tech reports that Deputy President David Mabuza has listed several reasons why it’s in the country’s best interest for the government to rescue the carrier. Reasons include the following:
- The government can facilitate international and regional trade with reliable air connectivity in the region;
- The airline will be a driver of economic activity as it will be a customer for food and beverage, retail goods, and business services;
- A national airline will be a direct contributor to the country’s tourism, creating jobs in the sector;
- SAA Technical’s aircraft maintenance provides services to other local airlines that do not have maintenance licensing. This will improve productivity levels across the economy;
- The airline would play a part in advancing the country’s innovation and skills development through SAA’s Cadet Programme, as well as contributing to the advancement of the aerospace industry’s technical capability.
“Considering all these economic benefits, it is notable that governments across the world recognise the airline industry as an essential economic enabler, and thus are rendering relevant support to their aviation enterprises,” -David Mabuza, Deputy president, South African government, as per Business Tech.
According to a November 25th report by Business Tech, Public Enterprises Minister Pravin Gordhan is reexamining old agreements, saying that they must be terminated as they impede the transformation process.
Gordhan says that the principle of seniority rigidly impacts and dictates how pilots are employed and dealt with by SAA, including on the subjects of promotions, demotions, salaries, and more. Referring to the airline’s 1988 regulating agreement (RA), Gordhan says that it cannot become part of the new airline.
Part of the change Gordhan wishes to see is a more diverse team of pilots, with the minister saying:
“Given the make-up of SAA’s pilot list, which comprises overwhelmingly of white males, this operates to the detriment of and discriminates unfairly against white women, black men, and especially black women,” -Pravin Gordhan, Public Enterprises minister via Business Tech
Auctioning off its supplies
Another quite recent piece of news regarding the airline is its move to auction off various memorabilia to raise money.
“According to a notice by WH Auctioneers, an unreserved online auction of items from SAA’s inflight service will take place from 23 to 26 November. Registration has already opened.“
Potential buyers had to pay a refundable deposit of 25,000 Rand ($1,600) and provide FICA documents to register. Among the long list of items up for auction were the following:
- Chopsticks (32,000 sets available)
- Earplugs (8,000 sets available)
- Premium brand crew luggage
- Paperware (2-ply tissues, toilet paper, flushable and non-flushable paper hand towels, refresher towels)
- Thousands of foil containers and corresponding foil lids in a variety of colors
- Toiletries (sanitizing spray, face and body wash, hand and body lotion, shampoo and conditioner from airline lounges)
Unfortunately, we have yet to hear about the outcome of the auction. However, we hope that the airline was able to bring in the cash needed to sustain it until it receives its government cash injection.
Do you think South Africa needs a national airline? Or can it go without one? Let us know your thoughts in the comments.