South African Airways on the Brink of Collapse

Airbus SAA

Star Alliance member South African Airways could very well be the third major airline to collapse during the Covid-19 pandemic. According to reports by Bloomberg, the airline offered all of its 4,700 employees severance deals, as it plans to lay off its entire staff. This decision was made after the South African government rejected further financial aid for the struggling carrier.

SAA past of financial difficulties is well documented. The airline had to heavily reduce its schedule at the beginning of this year. To complicate matters, the state owned carrier was involved in a number of corruption cases under former president Jacob Zuma’s administration. At time of writing, there is no final decision. SAA’s officials are bargaining with union representatives to find a better solution.

Still, the government’s decision to withhold further funding may be the final nail in the coffin for the airline. The worldwide travel regulations imposed to stop the spread of Covid-19 make it almost impossible to generate any revenue. Before a being grounded in April, the aircraft operated 35 Airbus aircraft. 16 of them are long haul planes, connecting South Africa to five different continents.

South African Airways maybe the third airline after Britain’s flybe and Australia’s Virgin Australia to fold during this crisis. In each case, the Coronavirus pandemic delivered the final blow to a struggling company.

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