The South African government shared on Thursday that it will support its national carrier with additional financial assistance. SAA will receive over R10bn ($600m) from the government. Its only stakeholder, to help the airline reemerge post-COVID-19.
The development follows a landslide victory from creditors on Tuesday, July 14 when a business rescue plan was passed with a 86 percent approval rating.
The government now says it's committed to providing “funding for the short, medium, and long term requirements of a viable and sustainable national airline.”
The government’s funding is said to be used in four ways:
To stabilize SAA’s balance sheet
To restructure the group’s entities
To provide capital for those entities
To create a viable restructured airline.
With this plan comes a plethora of changes to current SAA operations. The airline plans to re-enter service with just nine aircraft. Of those, only six will be in action, drastically scaling down the airline’s network and, at the same time, mitigating financial stress. For that to happen, South African Airways will sell a further 14 aircraft.
To date, SAA already shifted 17 aircraft out of its control and once the others are removed, it will be left with three A319s, four A320s and, two A350-900s.
Besides, SAA will lay off some 2,700 employees. The remaining 40 percent of SAA’s workforce will be split between temporary layoff and routine operations. 1,000 employees will be placed on layoff for training, which will last for 12 months. Within that period, these employees will be offered positions within the restructured airline. If they take the offer, then their jobs will be safe. However, after one year, any unemployed staff will be dismissed.
A further 1,000 staff will join the airline from its relaunch through until February next year
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