Aviation experts say the resumption of South African Airways (SAA) flights without the government’s capital injection could deepen the airline’s financial troubles.
SAA has announced it is preparing to resume domestic flights between Johannesburg and Cape Town from mid-June. It also announced the cancellation of all planned scheduled flights on regional and international services until the end of June 2020 with immediate effect.
Aviation analyst Joachim Vermooten says SAA will need financial support for the first six months to enable it to achieve a good load-factor. He says measures to combat the spread of COVID-19 will also make it difficult for SAA to generate enough revenue.
“It depends on whether the government is providing money for that. It’s clear that under the present conditions, you get the reasonable load-factor to start up headline operations immediately. Government has clearly indicated in the past that they don’t have any money to spare. So, we have to see what happens to start operations. Without demand rising quickly, (it) will actually increase the losses of SAA in the short term. They need funding to be able to do that.”
One of the unions at SAA, the National Transport Movement (NTM), has welcomed the move.
“We believe that in the interim, while the government is still exploring the new airline, it must service the public. It will then be a step in the right direction for employees to earn a salary during the COVID-19 pandemic,” says NTM president Mashudu Raphetha.
Retrenchment of SAA employees
Meanwhile, the Business Rescue Practitioners for SAA say they are going to seek an urgent date for the hearing of their appeal against the Labour Court judgment earlier this month.
The Court found that their move to retrench SAA employees was unfair. The Labour Court granted them leave to appeal the judgment on Monday.
Financial woes at SAA revealed during State Capture Commission: