South African Airways to undergo radical restructuring process as finances worsen

Source: Xinhua| 2019-12-02 23:50:56|Editor: yan
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JOHANNESBURG, Dec.2 (Xinhua) --South African Public Enterprises Minister Pravin Gordhan said the national carrier South African Airways (SAA) finances have deteriorated in recent weeks and as a result it would undergo radical restructuring process aimed at stabilizing it.

"The airline group will now need to go through a radical restructuring process which will ensure its financial and and operational sustainability. There's no other way forward," he said in a statement released late Sunday night.

Gordhan also blamed the seven-day strike that two unions embarked on last month as a contributing factor to deterioration of the company's finances. SAA lost over 50 million rand (3.4 million USD) every day due to the strike which left planes grounded.

"The strike initiated by Numsa (National Union of Metalworkers of South Africa) and Sacca (South African Cabin Crew Association) caused immense damage to the reputation, operations, and the deterioration of finances of SAA. SAA cannot continue in its current form," read the statement.

Economist, Professor Jannie told Xinhua on Monday that the airline has been financially struggling for some time.

"It doesn't come as a surprise, SAA has not released its financial statements in two years. That's been an indication that it was heading for liquidation or business rescue. Publishing financial statements will give us an idea of how much in trouble the company is and then we will understand what needs to be done to save the company," he said.

Some experts have suggested that the airline should reduce its labor force, however this move would upset unions who have vowed to oppose job cuts.

Numsa today said unions were not responsible for the decline of the company's finances.