After announcing that they were to resume flying from mid-June yesterday, South African Airways (SAA) has had to backtrack on its plans. This Wednesday, administrators for the state-owned-airline have rejected the idea that SAA can start domestic flights next month because of COVID-19.
Currently, South African Airways is operating under a form of bankruptcy protection and was forced to suspend all flights in late March. In a move designed to stop the coronavirus spread in the South Africa, government imposed a strict lockdown forcing the struggling carrier to ground its fleet.
In a statement released earlier, South African Airways administrators Les Matuson and Siviwe Dongwana said, “The position around the cessation of flights remains as is until SAA has a better sense of what the level 3 lockdown means in terms of domestic air travel. The airline also needs to consider what the opening of the skies will mean from a commercial and load factor perspective.”
What probably prompted South African Airways to say they would resume flights in June was an announcement from South African President Cyril Ramaphosa. When speaking about the gradual removal of the coronavirus lockdown on Sunday, the 67-year-old politician said that domestic air travel for business could start from June 1. This is when the South African government is set to move to phase three of its five-tier plan to remove the lockdown.
In its statement, SAA said that flights between Johannesburg and Cape Town would resume from mid-June and that international flights would be commenced when the situation allowed.
“Everyone at SAA is looking forward to welcoming and serving our customers once again. Our operational preparedness is underlined by the significant role the airline has played in global repatriations to and from South Africa and by our desire to serve the domestic market,” stated Philip Saunders, SAA’s Chief Commercial Officer.
With regards to South African Airways statement about resuming operations, the business turnaround specialists said that they had not read it and that future funding would determine when the airline could fly again.
When and if funding from the government materializes will ultimately determine how South African Airways will operate going forward. Given the airline’s history of mismanagement and the fact that it has not made a profit for nearly ten years will also play a huge factor. SAA has relied on government funding and hand-outs every time it ran short of money. Before going into receivership, the airline had accumulated debts of $1.4 billion and was losing money daily.
Up to now, the government has stood firm on its refusal to give South African Airways any more money. However, this does not seem to resonate with the airline management, who seems to think it will be business as usual.
If South African Airways somehow comes out of bankruptcy and starts flying again, it will be considerably smaller with far fewer destinations. Thinking about it purely in a business sense, SAA would be better off if all its employees were terminated, aircraft sold and, prized slots like those in London sold. Once achieved, a business plan could be formulated, and a new private-sector airline created with new aircraft and new employees.
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