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Government calls for review of SAA route cuts

‘We are not in agreement with what the rescue practitioners have come up with.’

President Cyril Ramaphosa said on Friday that his government did not agree with plans to cut some of struggling South African Airways’ (SAA) domestic routes, plunging rescue efforts for the cash-strapped carrier into uncertainty.

State-owned SAA entered a form of bankruptcy protection in December and is fighting for its survival.

Specialists appointed to try to rescue SAA said on Thursday that SAA would cease flights to Durban, East London and Port Elizabeth from February 29, as well as cutting some international routes, as part of efforts to conserve cash and make the airline more attractive to potential equity partners.

Read: SAA cuts domestic flight routes to one

SAA flights to Cape Town will continue on a reduced basis, the specialists said.

The public enterprises ministry, which oversees SAA, said it wanted the route changes reviewed.

“Government will be making representations to the Business Rescue Practitioners in order to balance the necessity for trimming unprofitable routes with the need to ensure the future sustainability of both the airline and South Africa’s aviation industry,” the ministry said in a statement.

Ramaphosa said in comments broadcast on state television channel SABC: “We are not in agreement with what the rescue practitioners have come up with.”

“SAA is not only a great symbol for the country, but it is also an economic enabler.”

Under South African company law, the business rescue team is entitled to take decisions that are deemed necessary to turn a distressed company around, independently of government. In theory it could ignore the government’s objections.

SAA is among several South African state entities including power company Eskom that are mired in financial crisis after nearly a decade of mismanagement.

SAA hasn’t made a profit since 2011 and has received more than R20 billion in bailouts over the last three years.

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Time and time again the government just can’t stop interfering for political reasons.

Well this is now just to save face. What an embarrassment for the ANC.
SAA will be the monument of the ANC’s failure to hold their executive accountable.

Not to worry there are many other SOE’s that can fulfill this, but SAA gets most of the headlines.

Great- first Another Night with Candles ignores investment rule 101- “Don’t throw good money after bad money”, scraping the barrel to buy 8 months of flying time. With unwitting pension money.

Now they want to dictate unqualified results and mumble as sour grape juice slides down the sides of their mouths. Great, take your muti!

Surely the answer is staring us in the face- Comair has been awarded a R1.16 billion settlement in its case against SAA in respect of unfair travel agent incentive schemes. No chance of getting paid- offer them a discount on SAA and sell off to those who know how to operate efficiently.

Comair is a great example of how local skills and know-how can cooperate effectively in a high technology global industry. Grief, in record time at the right price the ANC might even “pay back the money” for once!

A “joint venture” with Comair/ British Airways. Have a clause maintaining the “SAA/ MANGO” branding and a degree of separation from “the mothership” (BA) if necessary… But let those who know how to get the job done do so already.

Kry vir jou some cooperation with the (ex) colonial oppressor already- get over the candles and fire up the jet engines! Grow up- Viva!

The same article as yesterday?

This is South Africa. All articles are the same. There will be nothing new as long as the ANC is in control. It is a rerun of an old movie. We have seen it many times before, and yet, we still hope for a different ending this time around.

Reminds me of this quote: “The definition of insanity is doing the same thing over and over again and expecting a different result.”

Its the same government Christoffel, off course the articles will be similar :-p

Dear Cyril.

Frankly, we don’t care.

The business is now in business rescue and you can whistle Dixie.

The most you can do is threaten access to airports through your control of the badly-run airports, or through other regulatory threats.

Bring it on. We want SAA to fail. That’s all you can do. You’ve tried hard enough already to do that. Keep going, you’re almost there.

Regards,
The South African Taxpayer

What will he do the routes they save? Fly an empty plane with a few government and union officials on board.

I completely understand the anc’s reasoning here…. where else will they now get free business class flights to these destinations for themselves, their friends and family if SAA no longer does it? They can’t be seen dead on Mango or Kulula..It’s a disaster.

Here’s a novel thought – why does the ANC not drop the “struggle” mentality and adopt a “success” mentality.

…..ooh ….a success mentality is taking responsibility

Quite a foreign for an ANC cadre

Cause they are “struggling” to become “successful” 😛

Jip Etienne – they are not even successful at struggling yet – need more practice !!!!

I disagree; “they”, the ANC elites, who actually run the show, are massively successful, at making themselves billionaires. Cyril is a poster child for this and still greedy for more; EWC, NHI etc. These looters have Mugabe, dos Santos and Chavez money as their goals. Money talks for them personally, that is all.

Clearly the clowns thought the BRP wouldn’t recommend anything more drastic than(maybe) changing a logo or two – “Going South” instead of “South African” would be appropriate, for instance. Or perhaps the now traditional splitting into three separate entities, each with its own board, management, and multiple opportunities for yet more cadre drones. And, naturally, a loota continua…

The single reason why you appoint a BRP is he will make calls that the shareholder didn’t make. Now the headline here is the shareholder doesnt agree of with his calls? If the BRP would do the things the shareholder wanted to do, the whole process would make no sense would it

Now a novel idea to business rescue, government and soe’s. Cutting loss making income streams mean no income and further losses if overall costs remain the same. Cutting costs in order for income streams to become profitable cuts losses and generate profit.

I know it is going to take time to think this over but start cutting costs by firstly letting go surplus unproductive workers and then filter out other costs.

If you don’t do this the business will never be profitable and will ultimately close with all the workers without income.

That’s funny, because the rescue practitioners were not in agreement with what you had come up with. Otherwise they wouldn’t be there.

And once they’ve done their job at SAA, they can move on to RSA.

Well now, surely this ANC approach sort of kills the entire concept of the business practitioner process ? What are the legalities of interfering with the business rescue process ?

I also read in an article late 2019 that flights provided by SAA to parliamentarians and others in govt is guaranteed and can be done by any carrier anyway.So maybe SAA collapsing and handing this market to other carriers will greatly reduce this cost. Give the whole lot to Comair as payment of the fine….

Amazing! Its these foolhardy policies that have got us in this mess in the first place! Will not learn a lesson. Just amazing! What boobs!

Lost respect for this man. Made his riches via BEE. I am a pensioner and now has increased my pension withdrawal to a maximum of 17%. Using only part of my payout and reinvesting the rest into Nasdaq100 and Msci World Etf’s. It is not a hedge, it is certainty.

No wonder even the grass “is late” where they walk.

Time for SAA to be “Late”

I wonder if Trump and Boris interfere in the schedules and operations of their respective national airlines. Oh, wait…

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