This archive report was first published on 5 December 2019.
South African Airways (SAA) has been placed under a state-approved rescue plan to avoid its collapse, following a costly week-long strike in November 2019.
The strike, which began on November 15, was called off after SAA management and unions clinched a deal, but the walkout dealt a severe blow to the debt-ridden airline.
As of 2019, SAA has failed to make a profit since 2011 and survives on government bailouts. The airline's financial struggles have been exacerbated by corruption and mismanagement under former president Jacob Zuma.
South Africa's Public Enterprises Minister Pravin Gordhan announced the decision to place SAA into business rescue, stating that the government would provide 2 billion rand ($136 million) to the airline in a 'fiscally neutral manner.'
Existing lenders will also provide a 2 billion rand loan guaranteed by the government. The business rescue process will be directed by an independent practitioner, aimed at preventing a 'disorderly collapse of the airline.'
With a fleet of over 50 aircraft, SAA flies to over 35 domestic and international destinations. The airline employs more than 5,000 workers and is Africa's second-largest airline after Ethiopian Airlines.
Analyst Daniel Silke described the rescue plan as a 'lesser evil for SAA,' which would save more jobs than a 'shutdown.' However, he still expected jobs to be cut as SAA attempts to reduce costs.
