Plans to cut some South African Airways’ (SAA) domestic and international routes aim at making the airline sustainable and free from government funding after restructuring, experts appointed to rescue the company said.
State-owned SAA entered business rescue in December and is fighting for survival.
The rescue specialists said SAA would cease flights to Durban, East London and Port Elizabeth from February 29 and cut some international routes as part of efforts to conserve cash and make the airline more attractive to potential equity partners.
President Cyril Ramaphosa said government did not agree with plans to cut SAA domestic routes, plunging rescue efforts for the cash-strapped carrier into uncertainty.
“We recognise the concerns raised especially around domestic routes. We will continue to engage with stakeholders, with a commitment to include inputs into the final business rescue plan, due to be published by the end of this month,” SAA business rescue practitioners Les Matuson and Siviwe Dongwana said in a statement.
Under South African company law, the business rescue team is entitled to take decisions deemed necessary to turn a distressed company around, independently of government. In theory it could ignore government objections.
SAA is among several South African state entities including power company Eskom mired in financial crisis after nearly a decade of mismanagement.