South African negotiating redundancies for entire workforce, liquidation imminent

South African Airways is reported to be in negotiations with 8 unions in an attempt to reach agreement on a package to make its entire staff of 4,700 redundant.

Once it’s done that the rest of the airline will be wound up and it’s assets sold.

The airline entered bankruptcy protection in December, and was unable to persuade the government to bail it out for the third time in 18 months.

Since the end of apartheid and racial segregation, the airline did well for a while in the 1990’s and early 2000’s.

Growing corruption in government, endless political interference, government ‘perks’, excessive union interference and an unwillingness to change because it was always expected the government would never let the airline fail, caused a downward spiral it could never escape from. Incompetent managers didn’t help and CEO’s found their decisions ignored or blocked.

Covid19 has impacted South Africa and the government simply could not afford to spend another $400m on keeping a small sector of the economy going when so many others needed its help.

The loss of the airline will remove the second largest on the continent and force South Africa to rely on airlines from Europe – mostly BA, Virgin Atlantic and Lufthansa, but expect Emirates, Qatar, and Ethiopian to step into the market. Several links that will vanish and were considered important were the direct flight to Washington DC and New York as no US airline flew to South Africa.