Analyst says insurers decision to stop selling SAA tickets 'hugely significant' | IOL News

Johannesburg - Two big travel insurance companies have stopped covering tickets issued by South African Airways against insolvency as doubts grow about whether the struggling state-owned airline can survive.

While the move is unlikely to push SAA into liquidation by itself, it will hurt ticket sales and exacerbate a cash crunch that left the airline unable to pay salaries on time this month, analysts said. SAA has not made a profit since 2011 and has been struggling with an unprofitable network, inefficient planes and a bloated workforce, despite bailouts of more than R20 billion over the past three years.

Its financial position worsened dramatically after November 15, when two of its largest unions began an eight-day strike over pay that forced SAA to cancel hundreds of flights. Banks want additional guarantees from the state before they lend SAA more money but Finance Minister Tito Mboweni has refused, leaving the airline's finances on a knife edge.

Source: News Formal (newsformal.com)

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