JOHANNESBURG (Reuters) – Plans to cut some of South African Airways’ (SAA) domestic and international routes are aimed at making the airline sustainable and free from government funding after restructuring, experts appointed to try to rescue the company said on Sunday.

State-owned SAA entered a form of bankruptcy protection in December and is fighting for its survival. [nL8N28F0D5}

The rescue specialists said on Thursday that SAA would cease flights to Durban, East London and Port Elizabeth from Feb. 29, as well as cutting some international routes, as part of efforts to conserve cash and make the airline more attractive to potential equity partners.

South African President Cyril Ramaphosa said on Friday his government did not agree with plans to cut some of SAA’s domestic routes, plunging rescue efforts for the cash-strapped carrier into uncertainty.

“We recognize the concerns raised, especially around the domestic routes. We will continue to engage with stakeholders, with a commitment to include inputs into the final business rescue plan, which is due to be published by the end of this month, “SAA business rescue practitioners Les Matuson and Siviwe Dongwana said in a statement.

Under South African company law, the business rescue team is entitled to take decisions that are deemed necessary to turn a distressed company around, independently of government. In theory it could ignore the government’s objections.

SAA is among several South African state entities including power company Eskom that are mired in financial crisis after nearly a decade of mismanagement.

Reporting by Tanisha Heiberg; Editing by Mark Potter


Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Russia’s Financial System: How Vulnerable?

Is the Russian economy going to collapse? Do sanctions matter? These are the two questions most often asked today about the Russian economy said Sergey Aleksashenko, the former first deputy chairman of Russia’s Central Bank and a former deputy finance…

Trump says coronavirus ‘very well under control’ in US

NEW DELHI — President Donald Trump sought Tuesday to minimize fears about coronavirus spreading rampantly throughout the U.S., saying the situation is “very well under control in our country.” At the same time, the Trump administration on Monday asked Congress…

Central SOEs report 11.8% revenue fall in Q1

Centrally-administrated State-owned enterprises recorded revenue of 6 trillion yuan in the first quarter, a year-on-year drop of 11.8 percent, said the State-owned Assets Supervision and Administration Commission on Monday. More content to follow. Please refresh the page later. Original source:…

Coronavirus ‘could cause as much damage as 2008 financial crash’

A coronavirus pandemic could hurt the global economy as much as the 2008 financial crisis, analysts have warned, as stock markets plunged again on Thursday. The Dow Jones Industrial Average and S&P500 have both entered a “correction”, meaning a 10 per…