This archive report was first published on 2 December 2019.
South African Airways is facing financial struggles and has revived a proposal to partner with Ethiopian Airlines, a move that could help the airline expand into West Africa.
According to a five-month-old document drafted by former SAA CEO Vuyani Jarana, the partnership would see the two airlines work together to establish a Pan-African airline, with headquarters in Johannesburg.
"Given the thin margin nature of the airline business, under government control or government rules, it is unlikely SAA will deliver better margin performance. The government should consider exiting the airline business," Jarana's plan read in Sunday Times.
Under the joint venture, SAA would provide cabin crews, while Ethiopian Airlines would sublet SAA planes. The partnership would also seek to establish its presence in Mumbai, Bangkok, and Tokyo.
South African Airways is at the brink of bankruptcy, having last made a profit in 2011. The airline's financial condition worsened after it cancelled bookings due to workers' demands for more money.
Insurance companies have lost faith in the airline, with Sanlam Ltd.'s Travel Insurance Consultants excluding SAA from their insolvency cover. Flight Centre Travel Group (Pty) Ltd also no longer sells SAA tickets.
