“Dynamic” new South African Airways in the works

Business Rescue Plan prioritised for struggling national carrier

Image credit: © Dirk Grothe / Planespotters.net

The South African Government will develop a revamped international airline with a fresh business model and direction as the demise of the country’s flag carrier, South African Airways, is compounded by the COVID-19 pandemic.

The financially struggling South African Airways will embark on a new long-term vision and strategy with the goal of resurrecting SAA and converting it into a “new, dynamic airline”.

Last Friday [1 May 2020] the ministry said “extraordinary times call for extraordinary measures” for South African Airways, which has already received government bailouts to the tune of US$1.1 billion over the last three years in order to stay airborne. SAA hasn’t achieved a profit since 2011.

The SA Government has sought an expedited decision from a Business Rescue Plan committee to determine what paths SAA could adopt post COVID-19 to be in a stronger position.

“It will not be the old SAA but the beginning of a new journey to a new restructured airline,” the South African Government’s Public Enterprises Minister Pravin Gordhan said.

“The agreed intention is to produce an airline which is a catalyst for investment, job creation in key sectors, economic growth throughout all regions of the country and is a mirror to the world reflecting the splendour and beauty of our great nation. And to do so by designing an airline that will be funded through a variety of options such as strategic equity partners, funders and the sale of non-core assets and the parties are still of the view that the state must continue to play a role,” Gordhan said.

Image credit © Waldo Swiegers/Bloomberg

“The old SAA is dead, there is no doubt about that,” Bloomberg reported Gordhan saying last week. “But what will take its place may be some or all of the old SAA and maybe some other airlines too.”

Citing the coronavirus crisis, the ministry added: “Airlines around the world are failing, but with the correct vision, leadership, business and operating model, funding and implementation the new national carrier will be well-positioned to take to the skies again and contribute to the South African and African economy.”

Lead image: South African Airways A350 – Photo copyright © Dirk Grothe/Planespotters.net

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