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SAA has cancelled 162 flights due to the Covid-19 crisis and the travel restrictions put in place by the government, dealing another blow to the ailing state-owned airline that is currently under business rescue.
A total of 38 international and 124 regional flights have been cancelled until March 31, SAA said on Wednesday.
The airline, which is already in business rescue, said it had scaled down capacity in response to the low demand for air travel.
“The effects of the outbreak of the coronavirus (Covid-19) have led to travel disruptions and restrictions across the world, leading to the grounding of aircraft, releasing employees and cancelling flights for many airlines. SAA is not immune to these realities,” it said.
On Sunday, President Cyril Ramaphosa declared a national state of disaster and announced sweeping measures that include travel bans to high-risk countries. The ban kicks in on Wednesday.
The illness is devastating the airline industry globally as travel bans are imposed.
At a meeting at the National Economic Development and Labour Council on Monday after the president’s declaration of a national state of disaster, SA’s business community proposed cutting funding to noncritical state-owned enterprises, such as SAA and SA Express, as a means to shift resources to the country’s response to coronavirus.
The state-owned airline, one of several state-owned enterprises that were brought to their knees by mismanagement during the state capture years, entered business rescue in 2019 after several years of operational losses and government bailouts that have weakened SA's fiscal position to such an extent it's on the verge of losing its last remaining investment-grade rating.
The airline has accumulated R26bn of losses over the past six years.
In a bid to cut costs, the business rescue practitioners had already cut a number of domestic, regional and internal routes. Last week, they also informed staff that they were going ahead with the restructuring of the airline, which would see a number of job losses.
On Wednesday, SAA said it reviewed its flight schedule and had decided to operate flights only under circumstances where its load factors and other business considerations weighed in favour of scheduling flights.
“Notwithstanding the decline in demand, SAA continues to aggressively review its schedule to match capacity with demand to the extent possible. Where feasible, we will consider options that include cancelling and merging flights,” chief commercial officer Philip Saunders said.
The airline said for that for the time being, it would continue to operate to and from destinations unaffected by travel restrictions.
“Our priority is to assist those travellers wishing to repatriate to their home countries to do so as quickly and efficiently as possible. Naturally, this includes SA citizens abroad wishing to return home,” Saunders said.
Subject to the conditions set out in the travel ban announced by the government, SAA said it would also facilitate the transfer of qualifying passengers to or from the destinations it flies to that have been classified high-risk areas.
SAA is also offering its customers one free ticket change.
Another state-owned airline, SA Express, announced that it had suspended operations until further notice due to the virus.
SA Express flies locally and regionally, but with fear related to the spread of the virus, people are opting out of travelling. The airline was placed in business rescue in February after failing to settle its debt of R11m to global logistics firm Ziegler. It is the second state-owned airline to befall this fate.
The airline said its decision to halt operations over the virus would affect customers and staff. All noncritical staff will be placed on compulsory leave.
The company will use this time to review its current network and streamline operation for improved efficiency, it said. Earlier in March, the government put a halt to business rescue practitioners’ plans to ground the ailing state airline.
In September, SA Express received a government bailout of R300m to ease its operational and financial challenges. In 2018, it was granted a R1.2bn guarantee, which the airline said was swallowed by historical debt.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.