( 3minutes read)
· South Africa is seeking to create a national airline, after
closing down South African Airlines (SAA), which is facing liquidation
· The airline has been under voluntary business rescue since
December last year and the rescue practitioners are toying with the
idea of either a forced liquidation or a winding down process. The
airline has employee strength of 5,200 employees, whose plight is
uncertain
South Africa is seeking to create a national airline, after closing
down South African Airlines (SAA), which is facing liquidation. SAA
has been incurring losses since 2011 and has gone through a traumatic
phase. It progressively cut down the routes and number of flights.
Even then, the truncated airline could not survive after several
rounds of bailouts from the government.
As the broad contours of new airline is being discussed, there is a
broad understanding that it should be under the public and private
ownership to make the operations sustainable and to be comparable to
the best in the world. The airline is under voluntary business rescue
since December last year and the rescue practitioners are toying with
the idea of either a forced liquidation or a winding down process.
The airline has employee strength of 5,200 employees, whose plight is
uncertain.
Last month, the debt –ridden South African government government
refused to pay yet another R 10 billion ( US$ 531 million dollars) in
emergency aid to the company, claiming fallout of the coronavirus
pandemic. How the trade unions react to the new airline should be
watched since earlier, they refused a voluntary retirement scheme. The
government is also trying to bring foreign equity participants, which
according to experts, is difficult to come, when world over airlines
operations are disrupted and many of them are staring at very poor
bottom lines and even closures. The closure of SAA after 86 years
of its existence is mainly attributed to poor management and delay in
restructuring the airlines. It is the oldest airline in Africa.
