Administrators in charge of South African Airways (SAA) said on Tuesday that they were suspending all operations and putting the struggling state-owned airline under “care and maintenance” until funding for a restructuring plan was found.
SAA entered a local form of bankruptcy protection in December, after almost a decade of financial losses, and its longstanding woes have been exacerbated by the Covid-19 pandemic.
The administrators published a restructuring plan in June, but the government is yet to come up with the more than R10 billion ($590.7 million) needed for it work, despite committing to do so.
Public finances are massively stretched by its Covid-19 emergency response.
“The BRPs (administrators) have made a decision to suspend all the airline operations with immediate effect and are pursuing a process to put the airline under care and maintenance until funding discussions are completed,” the administrators said in a notice to affected parties.
They added that certain funders were willing to provide a portion of the funds for the airline’s restructuring plan, and that they were engaging with the government on the remaining funding needed.
A company’s assets can be put under care and maintenance to keep them in good condition when they are not being used. SAA has not flown commercial passenger flights since March, when the government imposed one of the strictest lockdowns in the world to contain the spread of the coronavirus, but it has flown repatriation and cargo flights since then.
“All existing cargo and repatriation flights will be undertaken. No new ones will be accepted,” a spokeswoman for the administrators told Reuters.