Struggling South African Airways To Save USD 47 Mn – Though It Comes With 900+ Job Cuts
South African Airways, the state-owned airline of South Africa is considering cutting over 900 jobs in an effort to save ZAR 700 Mn (USD 47 Mn), restructure the airline, and stem financial losses.
The airline made this known in a statement in which it revealed that it had started consultations with its more than 5,000 staff and was talking to labour unions.
The discussions centered around bringing down SAA’s massive debt, including a ZAR 21.7 Bn funding gap, that has forced the government to step in with bailouts on a number of occasions.
The airline has not turned a profit since 2011 and it is also being weighed down by severe funding difficulties and an inefficient and ageing fleet of airplanes.
It is understood that officials in South Africa have been searching for an investor to take a stake in the airline, but their efforts have so far proved futile.
“We urgently need to address the ongoing loss-making position that has subsisted over the past years. That is why we are undergoing a restructuring,” said SAA acting-Chief Executive Zuks Ramasia.
“No final decision will be taken until the consultation process is concluded. However, it is estimated that approximately 944 employees may be affected.”
At a media briefing on Tuesday, the executive team at the ailing state airline told a media briefing that SAA’s restructuring plan will be finalised by March next year and should save the firm ZAR 700 Mn (USD 47 Mn).
SAA was arguably the pride of African aviation until things took a dramatic evil turn over the past ten years. The airline went from a symbol of patriotic pride to a burden for taxpayers.
One of the recommendations from analysts has always been that the airline should trim down its bloated workforce even though it would come with consequences. And it looks like SAA is finally taking that advice.
Featured Image Courtesy: SAA