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South African Airways Axes Routes to Regain Profitability
As part of the bankruptcy protection process initiated at the end of 2019, South African Airways last week announced a series of measures that seek to return profitability to its operations.
The process is in the hands of two consultants specialized in these practices, led by Siviwe Dongwana and Les Matuson, who have been working with company executives, creditors, government authorities and industry experts to develop a restructuring program that, as reported in a statement, will be submitted at the end of February for approval by the creditors.
But in the meantime, the state airline decided to move forward in urgent measures that keep the box in order.
These include the cancellation of their flights from Johannesburg to Abidjan via Accra, Entebbe, Guangzhou, Hong Kong, Luanda, Munich, Ndola, and São Paulo starting on February 29, as reported by fin24.
The domestic network will be reduced to a minimum from the same date, leaving only the route between Johannesburg and Cape Town (Durban, East London, and Pt. Elizabeth). This will not affect flights operated by its low-cost subsidiary Mango.
The intercontinental destinations that will remain standing are Frankfurt, London / Heathrow, New York, Perth, and Washington, while the inter-African routes that follow are Blantyre, Dar es Salaam, Harare, Kinshasa, Lagos, Lilongwe, Lusaka, Maputo, Mauritius, Nairobi, Victoria Falls, Livingston, and Windhoek.
“These measures will strengthen SAA’s business. We believe it will give our most loyal customers security that we are heading in the right direction. We are focused on our goal of recovering SAA’s commercial health and creating an airline from which South Africans can be proud, ” Dongwana and Matuson said.
Regarding the potential job losses, they said that “it is our intention to restructure the company in such a way that we can retain as many jobs as possible. That will help us create a platform for a sustainable future. But unfortunately, a staff reduction will be necessary. “
The South African Airways fleet currently consists of seven A319s, 10 A320s, six A330-200s, five A330-300s, seven A340-300s, eight A340-600s, and four A350-900s.
2011 was the last year in which SAA made a profit, even though it has received financial bailouts worth USD $3.8 billion since 1994. Last year the National Treasury refused to continue providing more funds to the airline, whose finances were hit hard after the eight-day strike that took place at the end of November.
South African Airways once grew to become the most important air group in the African continent, but it came to this situation after years of management disasters caused mainly by the interference of political power in its administration.
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