Last updated on April 30, 2020
Top management of South African Airways has failed to convince the South African government to grant it further funding as its operations faltered. This dramatic development is unfolding as the world’s economy is taking a turn for the worse, the barrel of oil trading as low as $12 and most of the world passenger aircraft fleet still grounded by the coronavirus pandemy. If no recourse is found the carrier is likely to lay off its entire staff in the near future while it undergoes complete liquidation.
The airline which has existed for the last 86 years employs some 4700 people. Proof of a near liquidation is on the table is the fact that the airline is preparing to offer its employees severance packages, according to Bloomberg News online.
The package reportedly would consider granting employees a week’s pay for every year worked.
Already a team has been appointed to oversee a possible liquidation of most of the carrier’s assets, including real estate, landing slots and most likely aircraft. South Africa’s Department of Public Enterprise has been attempting to broker some kind of public financing package for a state-owned carrier that has failed to generate positive financial results since 2011.
The shocking news is suggesting that more negative consequences from the covid-19 crisis must be expected with South Africa and the rest of the world’s airline following a more than 70% fall in passenger traffic.
Struggling to reorganize into a more modern and efficient operation, South African Airways has attempted to sell nine of its older Airbus A340 aircraft this past January. As the covid-19 global crisis worsened earlier this month South African Airways found it could use its widebody passenger aircraft in cargo-only flights with medical supplies filling their underbelly cargo holds. Notably on April 6th when an A340-600 flew from Johannesburg to Frankfurt followed on April 10th by another A340-600 flight from Johannesburg to GuangZhou China.