South African Airways (SAA) will suspend intercontinental and African regional flights until the end of May because of the coronavirus, as administrators trying to save the airline said it could run out of funds in just over a week.
State-owned SAA has been on the brink of collapse for months and entered a form of bankruptcy protection in December.
It has not made a profit since 2011 and received more than R20 billion in bailouts over the past three years.
On Friday it said it would suspend flights to the US, Britain, Germany, Australia and Brazil until 31 May in response to a government travel ban aimed at stopping the spread of coronavirus.
SAA said in a later statement it would suspend flights to African cities including Accra in Ghana, Lusaka in Zambia, Harare in Zimbabwe, Windhoek in Namibia, Lagos in Nigeria and Entebbe in Uganda until the end of May. It would continue domestic services to Cape Town.
This is the second wave of mass cancellations last week, after SAA said it was cancelling 162 intercontinental and African flights in March and another struggling state-owned airline, SA Express, suspended operations until further notice.
President Cyril Ramaphosa announced bans on travel to countries considered “high-risk” as regards the coronavirus, including the US, Britain and Germany, all SAA destinations.
SAA’s business rescue team said in a letter to trade unions measures taken by governments to control the spread of the virus hurt bookings.
“Unless urgent and drastic measures are implemented without delay, the situation will deteriorate to such an extent that it will threaten the likelihood of the company being rescued,” business rescue experts Les Matuson and Siviwe Dongwana wrote in a letter dated 19 March.
Matuson and Dongwana said funds secured to sustain rescue efforts could run out by March 31, and asked unions to consider cash-conserving measures like a rotational layoff scheme and short-time arrangement starting within days.
But one of SAA’s largest unions, the National Transport Movement (NTM), said talks on Friday on the proposals had failed to reach an agreement. More talks are planned for next week.
NTM president Mashudu Raphetha said the union wanted the government to agree to another bailout and that SAA could save money by eradicating bloated tenders and rooting out corruption.
On Friday, Matuson and Dongwana also asked creditors for a two-month extension for their rescue plan until May 29.
