South African Airways could cut more than 900 jobs

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Struggling state-owned airline South African Airways (SAA) could cut more than 900 jobs as it restructures to stem severe financial losses, the airline said in a statement.

SAA said it had started consultations with its more than 5,000 staff and was talking to labour unions.

The airline has not made an annual profit since 2011 and is grappling with severe funding difficulties and an inefficient and ageing fleet of airplanes.

South African officials have been searching for an investor to take a stake in the airline, but their efforts have so far been unsuccessful.

“We urgently need to address the ongoing loss-making position that has subsisted over the past years. That is why we are undergoing a restructuring,” said SAA acting-Chief Executive Zuks Ramasia.

“No final decision will be taken until the consultation process is concluded. However, it is estimated that approximately 944 employees may be affected.”

In a dramatic fall from grace over the past decade, SAA has lost its place as Africa’s biggest airline and a symbol of patriotic pride to become a source of frustration for taxpayers.

Analysts have long said its workforce should be cut to bring it in line with regional competitors.

Ramasia said SAA has faced numerous challenges over the past few years culminating in the current grave situation. The challenges include, funding and liquidity challenges; inability to borrow indefinitely without repaying debt; high interest costs on loans; volatile and fluctuating fuel price; currency volatility; insufficient revenue and cash generation in relation to operating cost; ageing fleet which is expensive to maintain and is fuel inefficient, making it difficult for SAA to compete in the market place; and aggressive international and regional competition for revenue stimulation and network optimisation.

“In addition, SAA’s balance sheet has historically been weak and remains so despite recent substantial capital injections from the government. Our continued losses and reliance on government guarantees to borrow money from lenders, have increased the interest costs which impacts the operating cost of the business.

“We urgently need to address ongoing lossmaking position that has subsisted over the past years. That is why we are undergoing a restructuring process that seeks to ensure effective implementation of the accelerated Long Term Turnaround Strategy amidst the present prevailing operational challenges.



The scope of the restructuring encompasses all SAA divisions and departments and excludes the subsidiaries; SAAT, Mango Airlines and Air Chefs,” she said.