South African Airways unlikely to operate long haul for 2 years
In what will not come as a surprise to anyone who has been following the saga surrounding South African Airways (SAA), the airline is unlikely to resume long-haul flights until sometime in 2023. This news follows what interim CEO Thomas Kgokolo said to the South African Parliament in May when he suggested the airline may be able to return to the skies again in July or August.
Before ceasing operations, South African Airways offered long-haul flights from its main hub at O. R. Tambo International Airport (JNB) to all corners of the globe. Due to financial pressures and an attempt to survive, SAA stopped flying many of its long-haul routes in early 2020.
Many people say enough is enough!
Following years of losses, South Africa’s national flag carrier was placed under administration in December 2019 and ceased all operations in September 2020. Since then, the business practitioners in charge of turning the airline around have reduced staffing levels from 4,000 to 1,000 and put SAA’s Airbus A340-330s and A340-600s up for sale.
Despite many people in South Africa wishing that the airlines could be dissolved and no longer funded by taxpayer money, the South African government wants to resurrect the airline from the ashes. The plan is to start over with a slimmed-down staff and new, more fuel-efficient aircraft.
Before being named interim CEO of SAA in April, Mr. Kgokolo worked as a chartered accountant, financial consultant, and lecturer on the MBA and PDBA in corporate finance, financial, and management accounting.
SAA wants an equity partner
SAA and the people in charge of getting the airline up and running again have said all along that they would like to get an equity partner in to run the day-to-day operations. The problem here is that if another airline were interested, it would insist on no South African government interference.
At one point, it appeared that Ethiopian Airlines might have been interested, but that initial glimmer of hope has dwindled while they, like others, look to recover from the fallout left by the pandemic. Having said that, South African travel industry website Reise Vor 9 reports that the country’s minister for state enterprises, Pravin Gordhan, said on Tuesday that talks were at an advanced stage and that he hoped to announce a deal in the coming weeks.
SAA is in dispute with its pilot’s union
SAA exited business administration in late April after receiving a 7.8 million rand ($550 million) bailout from the South African government. With the money, SAA was able to pay off creditors and compensation to former employees. What they have not done, however, is solve a long-running dispute with its pilot’s union.
In April, the SAA Pilots Association (SAAPA) threatened to strike after being locked out of their jobs since December. The union claims that the business practitioners have used COVID-19 as an excuse not to pay the pilots wages.
Most labor disputes between companies and their employees are over increased wages and better working conditions. All the SAA pilots want is what is wages owed to them and three months severance pay. Currently, this is being dragged out in the courts and could presumably go on until a definitive ruling is made one way or another.
Long-haul short-haul, or maybe even no haul at all for now, as I can’t see SAA back flying until after the summer. I would love to know who the partner is that Mr. Gordhan says is interested.
