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FACTBOX: The struggles of the cash-strapped SAA

Here's a brief history of the airline which was on Wednesday ordered by President Cyril Ramaphosa to enter into voluntary business rescue.

FILE: SAA Airbus. Picture: GCIS

JOHANNESBURG - Failing state-owned airline South African Airways (SAA) will enter a business rescue process, a deputy minister and the parliamentary committee conducting oversight of the airline said on Wednesday.

SAA, which has not made a profit since 2011 and is dependent on government bailouts to remain solvent, suffered a crippling strike last month that forced the carrier to cancel hundreds of flights and pushed it to the brink of collapse.

Here is a brief history of the airline and details about its operations.

HISTORY

  • 1934: The airline begins operations after the government takes over assets and liabilities of Union Airways and renames it South African Airways.

  • 1945: SAA introduces its first inter-continental service from Johannesburg with stops in Nairobi, Khartoum, Cairo, Castel Benito (Tripoli) and Bournemouth. The trip takes 34 hours.

  • 1986: Due to economic sanctions linked to apartheid, flights to New York are suspended in Nov. 1986. The United States also withdraws from its landing rights in South Africa.

  • 1997: After white minority rule ends in 1994, SAA announces a new corporate identity with colours of South Africa’s new rainbow flag on its aircraft tail.

  • 2000s: SAA enters into Africa’s biggest jetliner deal, placing an order for 41 new Airbus aircraft for $3.5 billion.

  • June 2019: CEO Vuyani Jarana resigns, saying his turnaround strategy for the loss-making airline is being undermined by a lack of state funding and too much bureaucracy.

  • September 2019: SAA says a government cash injection of R5.5 billion approved for the 2019/20 financial year is expected at the end of the month but it needs more money.

  • November 2019: Two of SAA’s largest unions launch an eight-day strike, forcing it to cancel hundreds of flights.

  • December 2019: The public enterprises ministry says SAA needs a “radical restructuring”. It says the strike caused “immense damage” to SAA’s reputation and operations and led to a further deterioration in the firm’s finances.

A deputy minister tells Reuters on Wednesday he received a letter from the secretary of the Cabinet which said President Cyril Ramaphosa has instructed the government to put the airline in a “voluntary business rescue process”.

Parliament’s Standing Committee on Public Accounts (Scopa) says its chairperson had also been told about the plan.

FLEET SIZE AND SUPPLIERS

  • The SAA fleet comprises 48 aircraft, including 46 Airbus passenger planes and two Boeing cargo jets. Its partner airlines include low-cost subsidiary Mango Airlines, South African Express, Airlink and codeshare partners.

FINANCIALS

  • SAA has made losses of more than R5 billion for each of the past three financial years, according to company documents reviewed by Reuters. The last time SAA publicly published its financial results was for the 2016/17 financial year, when it made a R5.6 billion loss.

DEBT

  • SAA had debt of about R12.7 billion in August 2019.

NUMBER OF WORKERS

  • SAA, which lost its place as the continent’s biggest airline in the last decade, employs roughly 5,000 people. Around 10,000 staff are employed in the SAA Group, which also includes maintenance division SAA Technical and catering arm Air Chefs.

HUB

  • Johannesburg

PASSENGERS

  • Carried 6.8 million passengers in 2016/2017.