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South African Airways To Lay Off 4,700 Workers, Risks Collapse

MIAMI – South African Airways (SAA) is set to lay off its entire 4,700-strong workforce after failing to convince the government to provide more financial help, risking the collapse of the 86-year-old national airline.

According to a proposal to eight labor groups, SAA has offered a severance package to all staff starting in May after administrators concluded that a successful turnaround is now unlikely.

The compensation includes one-month pay per year of service and will depend on the successful disposal of assets such as real estate, according to the document from a report by News24.com.

The South African carrier has not made any profit since 2011, having relied on bailouts and state-guaranteed debt agreements and bankruptcy protection for years. So far, SAA has been flying cargo planes and chartered flights in recent weeks, but no commercial passenger services.

But COVID-19’s unexpected fallout entails SAA’s demise, as the company was already cutting routes and planning job cuts before the outbreak happened.

According to Gulf News, Public Enterprises Minister Pravin Gordhan said that the cost of fighting off the COVID-19 pandemic translated to zero cash for any form of bailout. Even worse for SAA, Finance Minister Tito Mboweni said the airline’s demise might help strengthen state finances.

Selling assets to gain cash According to Bloomberg, SAA administration chiefs Les Matuson and Sizwe Dongwana plan to sell assets to repay creditors. In addition, according to industry insiders, two highly valued nighttime operating slots at London Heathrow could be up for grabs.

After having seen nine CEOs pass by its ranks in the last ten years and aloof back-and-forth oversite by the Department of Public Enterprises and the National Treasury, SAA, a state-owned company, has become, like many other state companies, technically insolvent without state support.

Moreover, the company has been riddled with mismanagement and corruption scandals over the years, most notably under the presidency of Jacob Zuma, which ended just 2 years ago.

What is about to happen to SAA is nothing short of a warning to financially weak carriers grappling with the ongoing fallout of the COVID-19 pandemic, especially those that are doing so without any form of government assistance.


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Damn shame ..I liked them best of all.....Nice people and good food ...Sorry to here.....

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Damn shame ..I liked them best of all.....Nice people and good food ...Sorry to hear.....

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TIA


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I flew on SAA out of Atlanta, when they still flew from there, and later on Delta. I preferred Delta because they didn't have to land on some God-forsaken island in the Atlantic, which wasted a couple of hours.


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Flew them to joBurg once. Very good experience.


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Airlines everywhere are in trouble... we lost our primary commuter line and it is about to be sold off...


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I don't see spending money in a spook run country, but whatever makes you happy.

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The couldn't fit spinner rims to those airplane tires?

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Flying SAA to the RSA was never a viable option for me. I used KLM through Amsterdam.

However, the loss of SAA internally in the RSA or the rest of Africa could be problematic. Not very many airlines allowed firearms. SAA was just about it in the RSA.

As for some of the other inane comments, I'd rather be in the "spook run" RSA, than the South side of Chicago.

South Africa is a beautiful country.

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Originally Posted by JGRaider
South African Airways To Lay Off 4,700 Workers, Risks Collapse

MIAMI – South African Airways (SAA) is set to lay off its entire 4,700-strong workforce after failing to convince the government to provide more financial help, risking the collapse of the 86-year-old national airline.

According to a proposal to eight labor groups, SAA has offered a severance package to all staff starting in May after administrators concluded that a successful turnaround is now unlikely.

The compensation includes one-month pay per year of service and will depend on the successful disposal of assets such as real estate, according to the document from a report by News24.com.

The South African carrier has not made any profit since 2011, having relied on bailouts and state-guaranteed debt agreements and bankruptcy protection for years. So far, SAA has been flying cargo planes and chartered flights in recent weeks, but no commercial passenger services.

But COVID-19’s unexpected fallout entails SAA’s demise, as the company was already cutting routes and planning job cuts before the outbreak happened.

According to Gulf News, Public Enterprises Minister Pravin Gordhan said that the cost of fighting off the COVID-19 pandemic translated to zero cash for any form of bailout. Even worse for SAA, Finance Minister Tito Mboweni said the airline’s demise might help strengthen state finances.

Selling assets to gain cash According to Bloomberg, SAA administration chiefs Les Matuson and Sizwe Dongwana plan to sell assets to repay creditors. In addition, according to industry insiders, two highly valued nighttime operating slots at London Heathrow could be up for grabs.

After having seen nine CEOs pass by its ranks in the last ten years and aloof back-and-forth oversite by the Department of Public Enterprises and the National Treasury, SAA, a state-owned company, has become, like many other state companies, technically insolvent without state support.

Moreover, the company has been riddled with mismanagement and corruption scandals over the years, most notably under the presidency of Jacob Zuma, which ended just 2 years ago.

What is about to happen to SAA is nothing short of a warning to financially weak carriers grappling with the ongoing fallout of the COVID-19 pandemic, especially those that are doing so without any form of government assistance.


I haven't heard anymore on this, but it's not good.

#1 - less competition means higher fees to fly to southern Africa.

#2 SAA had (I feel) better pilots and better maitainence than any of the other "African"carriers. That of course may have changed in the past few years but all was good in 2018 when I used them. Never want to fly Cameroon Air again!


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The retired dentist who is my driver and tour guide in Johannesburg warned me in April 2019 that in his opinion SAA was in grave danger. When i asked why he said government over regulation/control and mismanagement. He said the ANC leadership and SAA upper management siphoned away any cash SAA generated. That is why they haven't posted a profit since 2011.


Last edited by AB2506; 07/06/20.

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