SAA cuts routes

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South African Airways (SAA), which entered business rescue in December, will scale back domestic and international routes from the end of February, specialists appointed to rescue the airline said.

State-owned SAA will deploy more fuel efficient aircraft, renegotiate contracts with suppliers, reduce employee numbers and consider asset sales as part of rescue efforts, the specialists said in a statement.

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

The airline hasn’t made a profit since 2011 and received more than R20 billion in bailouts over the last three years.

SAA business rescue practitioners Les Matuson and Siviwe Dongwana said from February 29 the airline would end international flights to Abidjan via Accra, Entebbe, Guangzhou, Hong Kong, Luanda, Munich, Ndola and Sao Paulo.

Domestic flights to Cape Town will continue on a reduced basis and SAA will cease operations to Durban, East London and Port Elizabeth from the same date
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International services between Johannesburg and Frankfurt, London Heathrow, New York, Perth and Washington via Accra will be retained.

“The initiatives we are taking will strengthen SAA’s business,” Matuson and Dongwana said in the statement.

“The decisions and actions aim at improving SAA’s balance sheet, creating a platform for a strong and sustainable airline and ensuring the company is attractive for potential strategic equity partners.”

The rescue experts are due to publish a restructuring plan in late February that will be presented to creditors for approval.

Their statement said customers booked on cancelled international routes would receive a full refund. Passengers on cancelled domestic flights will be accommodated on low-cost SAA subsidiary Mango Airlines.

Repeated bailouts for cash strapped state firms stretched public finances, hurting the country’s credit ratings.



Moody’s is the last of the major international agencies to keep an investment grade rating on the sovereign and is scheduled to review the assessment in March.