This file photograph taken on Could 25, 2010, reveals a South African Airways aircraft parked in a bay on the tarmac on the Johannesburg O.R Tambo Worldwide airport in Johannesburg, Gianluigi GUERCIA / AFP
South Africa’s cash-strapped nationwide service shall be changed by a brand new airline after years of mismanagement and debt, the federal government mentioned Friday, as plans for its rescue have been marred by the coronavirus outbreak.
South African Airways (SAA) was positioned underneath a state-approved turnaround plan in December as a last-ditch resort to avoid wasting the corporate from complete collapse.
All its flights have been grounded since South Africa closed its borders and went right into a five-week nationwide lockdown in March to curb the unfold of COVID-19.
Final month, the federal government turned down a request for 10 billion rand ($531 million) of additional funding by SAA’s enterprise directors, claiming sources had been stretched by the pandemic.
The ministry of public enterprises on Friday mentioned a “new and bold approach” can be required for South Africa to keep up a aggressive airlift capability after the “fog of economic uncertainty” attributable to coronavirus.
“The creation of a new, dynamic airline, with the correct corporate structure… will allow for the new SAA to compete in the post-COVID-19 world,” mentioned the ministry in an announcement.
“The new national carrier will be well-positioned to take to the skies again and contribute to the South African and African economy.”
No clear timeline was given for the creation of the “new restructured airline” that may contain each private and non-private participation.
In accordance with the ministry, it will likely be funded by a variety of events that may permit the state to “continue to play a key role”.
SAA employs greater than 5,000 employees and is Africa’s second-largest airline after Ethiopian Airways.
Like most South African state-owned enterprises (SOEs), it has didn’t make a revenue for greater than a decade and survives on authorities bailouts.
“The transition to the new airline may require sacrifices,” the assertion mentioned, including that workers “may be displaced”.
Up to now South Africa has recorded a minimum of 5,647 coronavirus circumstances — the best in Africa — together with 103 deaths.
Some confinement measures had been lifted on Friday and financial exercise is slowly starting to renew in sure sectors.
However Transport Minister Fikile Mbalula on Friday mentioned it was nonetheless too early to think about ending air journey restrictions.