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South African Airways to Cut many International and Domestic Routes

South African Airways will stop eight international routes from Johannesburg, as the airline undergoes a business restructuring aimed at easing its financial woes.

From February 29, it will no longer serve Abidjan via Accra (Ghana), Entebbe (Uganda), Guangzhou (China), Hong Kong, Luanda (Angola), Munich (Germany), Ndola (Zambia), and Sao Paulo (Brazil).

On its domestic route network, it will continue to serve Cape Town from Johannesburg on a reduced basis but will end all other destinations, including Durban, East London and Port Elizabeth.

Domestic routes operated by its low-cost subsidiary Mango will not be affected.

Customers booked on cancelled flights will receive a full refund, or be re-accommodated on services operated by Mango.

International services between Johannesburg and Frankfurt, London Heathrow, New York, Perth and Washington via Accra will be retained.

Regional services from Johannesburg to Blantyre, Dar es Salaam, Harare, Kinshasa, Lagos, Lilongwe, Lusaka, Maputo, Mauritius, Nairobi, Victoria Falls, Livingston and Windhoek will also continue.

The business rescue practitioners (BRPs) leading the restructure said that while a full plan would be published in late February, some measures needed to be implemented more quickly due to an “urgent” need to conserve cash.

As well as route network changes this will include the deployment of more fuel-efficient aircraft, optimisation of organisational structures and renegotiation of contracts with suppliers.

The BRPs said that “rationalisation programmes are under consideration for SAA’s subsidiaries, as well as the sale of selected assets,” in order to improve liquidity.

In a bid to reassure potential passengers, they added that further route changes are not expected.

Employee numbers will be reduced, but the number of job cuts has not been announced.

South African Airways was saved from the brink of collapse in late January when it was given 3.5 billion rands (£185 million) in emergency funding from the government-owned Development Bank of Southern Africa.

The airline was placed in a form of bankruptcy protection in December, but an expected 2 billion Rand (£104 million) government loan was postponed, with South Africa’s finance minister saying the bailout could not increase the country’s budget deficit.

The state-owned airline has not made a profit since 2011, and bailouts over the last three years have totalled more than 20 billion rands (£1 billion).

The airline’s BRPs say they are now planning to “develop a sustainable, competitive and efficient airline”.

H/T: Business Traveller

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