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Airlines

South African Airways Is Nearly Out of Business

South African Airways Is Nearly Out of Business
Meg Butler

Bad news for South African Airways comes just on the heels of their failed bid for financial aid from the South African government: South Africa’s flag carrier may be forced to close.

While South African Airways hasn’t officially announced ending operations, it has announced its plans to lay off all of its 4700 employees at the end of the month of April. Each of the employees will get a severance package equal to roughly one weeks’ pay for each year of service. However, those severance packages depend on “successful disposal of assets such as real estate.”

South African Airways says its “unlikely” that they will be able to make a quick turnaround. However, South Africa’s Department of Public Enterprises has said that “there are discussions with the unions on alternatives to the current South African Airways business model, success of the business rescue process, and the best possible outcome for the airline’s employees.”
While the coronavirus has had a devastating effect on South African Airways, this is not the first time the airline has been in financial trouble. The last time the airline made a profit was in 2011, and it has been dependent upon state-guaranteed debt agreements for years.
However, with the coronavirus putting more stress on South Africa’s economy, no more financial support has been extended to the airline. Furthermore, South African Finance Minister Tito Mboweni said that South Afric Airways’ closure could actually help ease some of the burden on the country’s finances.
View Comments (13)

13 Comments

  1. HGB

    April 21, 2020 at 6:09 am

    Something like this is always sad. This being said having flwn SAA a number of times, I must say that even in business class, the service over the 10-15 last years was terrible. This explains part of the problems they’ve had over the last years.

  2. yeldogt

    April 21, 2020 at 6:32 am

    While sad to see them go — is it any surprise? Have flown often .. spotty at best. Political placements at the top — no direction. No marketing/ sales experience or direction. Willing staff — with little direction. Poorly priced product as well. Could go on and on. I’m not feeling warm and fuzzy about SA in general these days. Last couple trips to east Africa I took the Kenya flight from JFK and backtracked to SA. KA — better .. but still needs some improvement. The BA through LHR is a pain

  3. Buddy Eleazer

    April 21, 2020 at 7:05 am

    Yikes, I lead photo trips to South Africa and am holding many tickets/vouchers for future travel due to cancelled safari trips. Some on SA Express, some on main SA and a few on codeshare with Mango and/or SA Airlink. I wonder if the latter two will honor the vouchers.

  4. oktoberfest

    April 21, 2020 at 8:17 am

    not sorry to see the racist airline go.

  5. leiserom

    April 21, 2020 at 11:01 am

    I first flew them in the mid 70’s. Was great. Then we went back to SA ten years ago. Was terrible. Unfriendly staff disorganized boarding. Some of the FA’s were flat out racist.

  6. twyatt

    April 22, 2020 at 1:38 pm

    I traveled to S Africa last year for vacation, beginning and retuning to GRU – which was suspended even before the virus – and had mostly good experiences with SA. However, this situation is like an animal in pain……. since it’s not viable and has been a loser for all these years, maybe it’s time to put SA out of its misery.

  7. Bretteee

    April 22, 2020 at 5:35 pm

    Flew on SAA from New York to Joburg and it was great in economy. Great food, fantastic crew and 33″ legroom. The entertainment system was down in both directions but I don’t care.

  8. Gizzabreak

    April 22, 2020 at 11:05 pm

    Oh c’mon, don’t be so pessimistic, it’s just a few minor hiccups in the transition to indigenous rule. Will be all ok once they find the instruction manual the previous team left behind.

  9. gsvt

    April 23, 2020 at 4:18 pm

    I commuted monthly between The US and South Africa In the late between 1998 and 2000, and since then have returned every three years or so, usually on SAA. Their decline has been due to poor management, appointed by the gov’t, and an inability to make hard decisions. For me, their service was mostly very good and I looked forward to flying with them. I also admired the pride that most of their employees had for South Africa. Whatever happens, there will always be a fond place in my heart for SAA.

  10. spartacus

    April 24, 2020 at 8:40 am

    Gizzabreak, I sure hope that’s an attempt at humor. Even if it is, racist much?

  11. Irpworks

    April 28, 2020 at 9:45 pm

    When a political party defines itself by racial identity it can hardly be racist to point out such and note the failures of such a philosophy which puts race above all, including competence.

  12. jaws3

    May 10, 2020 at 5:21 pm

    Slightly off topic but relates to above comment about race. The same political party now uses race as the basis for financial aid due to Covid crisis. The decision was challenged in the High Court but did not succeed. An appeal is apparently planned. One example of the race based aid system is that a small hotel, whose two owners are white, had to let 46 staff members go because they (the owners) do not qualify for government aid – due to being white. A less draconian policy was followed at SAA with staff appointments but it was clearly enough to sink this ship. My first trip on SAA was in 1973 (and a domestic flight as recently as 1Feb2020) and I can honestly say I saw the decline (service delivery standards, flight delays/cancellations, customer service issues) over the decades since then. FWIW – SAA and SA Express are bound together financially and will sink together. Mango and SA Airlink are separate entities and may survive as their “Covid problems” are the same as any other airlines’. Except that SA Airlink used SAA’s booking system for ticket sales and SAA then paid the money over to SA Airlink. But that has not happened since around December 2019 and SA Airlink is now owed hundreds of millions ZAR because of the non-payment by SAA. And for those who are curious: No – I do not live on the African continent.

  13. edgewood49

    May 12, 2020 at 9:57 am

    No matter what it all boils down to mismanagement whether it was from governmental interference, payoffs or whatever else bad management is the root cause which is the first place you look when there is a take over merger etc.

    The failure to bring in experienced managers always spells doom. I have flown SAA many times all within the continent over the years and had found the planes to be clean, food was much better than any US airline in main cabin, some even first class food, service was good on board, timelines customer service slow sometimes marginal.

    Now it appears Ethiopian will be the last major carrier in the continent, hopefully Airlink will survive.

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