Administrators deny South African Airways set to start flying
by ReutersJOHANNESBURG, May 27 (Reuters) - Administrators at South African Airways (SAA) said on Wednesday the state-owned airline was not preparing to resume domestic flights, rejecting a company statement from a day earlier and underlining conflicting visions of its future.
The administrators have been in charge of the struggling airline since December, when it was placed in business rescue – a local form of bankruptcy protection – after almost a decade of financial losses.
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In late March SAA suspended all commercial passenger flights as the government imposed one of Africa’s strictest anti-coronavirus lockdowns. And last month the government said it would not provide further funding, pushing the business to the brink of collapse.
On Tuesday, SAA said it aimed to resume flights between Johannesburg and Cape Town, its only domestic route, in mid-June after President Cyril Ramaphosa said air travel for business purposes would be allowed under eased lockdown restrictions.
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But the administrators said they had not vetted the statement and that future funding was an important determinant of whether flights could resume.
“The position around the cessation of flights remains as is until SAA has a better sense of what the level 3 lockdown means in terms of domestic air travel,” SAA’s administrators, Les Matuson and Siviwe Dongwana, said in a statement.
“The airline also needs to consider what the opening of the skies will mean from a commercial and load factor perspective.”
SAA’s roughly 5,000 employees have been on unpaid leave since the beginning of May, and the administrators say the airline does not have enough cash to pay their salaries.
Derek Mans, aviation organiser at the Solidarity trade union, said the only money employees can expect to receive this month is from the Unemployment Insurance Fund.
Unions are in discussions with the government to try to cushion the blow to staff, but officials have not given any clarity on additional funding for SAA, Mans added.
The administrators have said that without extra funds their preference is for a structured wind-down of the company. But the government has expressed outrage at that approach, arguing the airline is a national asset that can be saved in some form.
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The government has floated the idea of creating a new airline from the ashes of the old SAA, although aviation experts are sceptical given the stretched state of the public purse and the huge impact the coronavirus pandemic is having on the global airline industry. (Additional reporting by Olivia Kumwenda-Mtambo; Editing by Joe Bavier and David Evans)
Reuters
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