The reports of my death are greatly exaggerated. – South African Airways
Details are still emerging, but it appears that South African Airways may not be dead after all, though it is anyone’s guess as to what will emerge from the rubble.
Reuters reports that the South African government and trade unions will work together to a create a “new financially viable and competitive airline.”
At the same time, the government reiterated that it was “not in a position” to extend a further financial lifeline to to the beleaguered flag carrier.
What does this mean? The short answer is that we do not know. But talk of creating a new flag carrier is a step further than just letting SAA die.
A major problem for SAA is its crippling legacy costs. A bloated labor force and unions unwilling to bend is simply unworkable. But what if South African sheds it labor costs, rehires a more limited cadre of workers at lower wages, renegotiates other structural debt (tough since the South African government has guaranteed it), and emerges under the same name?
It is possible. For now, though, we have to wait on the sidelines and watch the political wrangling…and inevitable industrial action that would result from such a move.
South African Airways is dead. Long live South African Airways 2.0?
I’ve commented on this before, but if you fly SA you see just how unsustainable the business is. They seem to have 5x the number of employees (especially in the airport, on the ramps, etc.) than any other carrier. Many of which don’t really appear to be doing anything.
It really feels like focusing on flights within SA (and potentially one day Africa), would be the right approach forward, partnering with others to bring traffic in from outside to JNB / CPT
Sounds an awful lot like bankruptcy to me: abrogate debt, break unions to rehire a lot less people at a lower price, dump pension liabilities, and generally be able to ignore contracts. That kind of thing.
And meanwhile what happens to those of us who are supposed to fly with SAA in the not too distant future? (September ) I can’t get a refund for my canceled flight (May)
Your only recourse is likely to reach out the travel agency or credit card issuer you booked your ticket with. Good luck.
I’m usually the last person to argue for privatization, but that seems like the only thing that will create a viable major airline for SA without requiring constant government handouts. There is too much corruption and patronage at the company through many leadership changes which prove that the government is unable to keep it going without constant cash infusions.