SAA enters bankruptcy protection

The South African government has placed SAA into Special Bankruptcy Protection.

Understanding that the airline, which hasn’t made a profit in seven years, hamstrung by outdated four engined aircraft and too many staff as well as date airports and facilities, the Government has made an operating loan – not a grant – to the airline to keep it flying.

However, the special bankruptcy protection, a far more protective legal position than normal bankruptcy, prevents any union actions to stop restructuring.

And the government is not mincing words. It absolutely expects South African Airways to begin a hard and harsh restructuring – nothing is off the menu in terms of options to make the airline fit enough to stand alone.

In reality there’s been little choice. Constantly bailing out the airline and pandering to union pressure has slowly undermined it, never managing to make changes needed until its now at such a crisis point, it’s got to be savage and ruthless. No more putting off hard decisions, no more excessive spending on pointless and wasteful projects.

Quite what will happen is now in the hands of airline managers. Do they have what it takes? It’s yet to be seen.

What do you think?