One of Africa’s biggest airlines warns that a fifth of its staff face job losses as the company restructures.
South Africa Airways (SAA), which employs more than 5,000 people, hasn’t made a profit in nearly a decade and survives on government bailouts. It currently has debts of over $600m (£465m).
Delivering his medium-term budget speech last month Finance Minister Tito Mboweni cast doubt on the company’s future, saying: “SAA is unlikely to ever generate sufficient cash flow to sustain operations in its current configuration.”
The airline’s top brass has taken that stark warning to heart, and is now attempting to slash costs and ease its cash flow problems.
Some in the public and private sectors are calling for state-owned SAA to be privatised. South Africa’s finance minister supports the idea, and has said the government is open to prospective equity partners.
Unions however say that would threaten its members’ livelihoods, and are vowing a shutdown should jobs be cut.
The airline has not made an annual profit since 2011 and is grappling with severe funding difficulties and an inefficient and ageing fleet of airplanes.
South African officials have been searching for an investor to take a stake in the airline, but their efforts have so far been unsuccessful.
“We urgently need to address the ongoing loss-making position that has subsisted over the past years. That is why we are undergoing a restructuring,” said SAA acting-Chief Executive Zuks Ramasia.
“No final decision will be taken until the consultation process is concluded. However, it is estimated that approximately 944 employees may be affected.”
In a dramatic fall from grace over the past decade, SAA has lost its place as Africa’s biggest airline and a symbol of patriotic pride to become a source of frustration for taxpayers.
Analysts have long said its workforce should be cut to bring it in line with regional competitors.
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