We’ve all joked about how it’s impossible to kill off South African Airways, the Alitalia of the southern hemisphere. But it seems not even SAA can weather the 2020 aviation crisis. The airline had suspended all international and domestic flying in late March, and the South African Government has discontinued financial support, crippling the carrier. But phoenix-like, the government is already busy working to ensure a new carrier emerges from the ashes of SAA.
With a history tracing back to 1934, the South African flag carrier flew to six continents in its heyday. But the government-owned airline has frequently struggled to make a profit. Longstanding government interference, mismanagement, and poor business practices have exacerbated SAA’s woes.
For some time, the airline has relied on financial assistance from the government to keep operating. The South African Government has poured more than USD$1.1 billion into the airline over the past three years.
The South African Government turns off the funding tap
Now, the South African Government has turned that tap off. SAA has been told there will be no more funding from the government, no more lending guarantees, and foreign financing of a rescue plan will not be allowed.
All of SAA’s 5,000 odd employees are due to have their employment terminated by the end of April. The airline’s administrators say this is by mutual agreement.
No airline ready to step into the breach
But Corona is impacting all sectors of the South African economy, not just SAA. It is causing the government to refocus its thinking about SAA. However, the closure of SAA isn’t without its problems. Ogaga Udjo, founder of ZA Logics, an aviation consultancy in Johannesburg, says;
“If SAA were to collapse tomorrow, there would be no other local airline that could immediately take up its place.