SAA enters danger zone as companies start withdrawing business

The national carrier has been given R57bn in bailouts since 1994 and last made a profit in 2011. Its already precarious finances took another hit last month when workers staged a week-long strike that grounded a number of flights, and customers have canceled bookings on others.

“Its balance-sheet viability game is now very much in injury time. Tough strategic decisions need to be urgently implemented to put it on a sustainable footing and to regain the confidence of customers and other stakeholder." “We have had to make an immediate move to mitigate the risk to ourselves and our clients,” said Andrew Stark, Flight Centre’s managing director for Middle East and Africa.The biggest and most immediate impact of the loss of insurance cover and travel agency bookings will be on SAA’s domestic business-travel revenue, according to Joachim Vermooten, an independent airline economist.

SAA, which offers flights to more than 30 local and international destinations, began operating in 1934 when the government took over the assets and liabilities of Union Airways. The government sold a 20% stake in the carrier to Swissair in 1999 and bought the shares back in 2002 after the Swiss carrier went bankrupt. While the government has said it will consider selling an equity stake, no tangible progress has been evident.

Ja clever unions. see what happened with mining etc

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