SAA flights June lockdown

SAA values Voyager members. Image : Michele Spatari / AFP

All SAA flights including those for repatriation to stop operating on 8 May

Minister Pravin Gordhan on Wednesday 6 May shared the latest developments pertaining to South African Airways (SAA).

SAA flights June lockdown

SAA values Voyager members. Image : Michele Spatari / AFP

Minister of Public Enterprises, Pravin Gordhan, addressed the nation on Tuesday 5 May to give an update about the future of the South African Airways (SAA). The outlook is bleak.

Many borders across the world are closed. Traffic between Europe and United States have been interrupted as well. […] It will take a very long time before the industry recovers.

What is happening with SAA?

All SAA flights grounded on 8 May

In many countries, but not all, some governments are “giving considerations for assistance to airlines”, such as the British government. The United States will be paying staff, “but nothing else”, Gordhan adds.

Gordhan explained that all flights, “repatriation or otherwise” will stop on 8 May 2020.” He added that the SAAs finances will be examined within the next 48 hours to draw up a plan “beyond 8 May”.

He added that there should not be a movement towards liquidation when there are alternatives to be pursued. There are also legal issues to be dealt with, such as when exactly a fully-fledged business plan will be presented.

Gordhan added that, in his view, there should be no fire sale of important assets of SAA, and added that government plans to convert SAA into a new airline. However, not all current SAA will keep their jobs.

SAA, as it exists, will not exist into the future, partly for the reasons that it was not competitive and unviable, but also because of the whole environment – both within aviation and the economy more generally – has changed very significantly. […] Nobody can quite anticipate what air travel is going to be like even two months down the line.

Travel challenges in general

Gordhan explained that domestic flights will start off on a slow basis, regional will be “the second starter”. He added one of the challenges airlines face, is how to achieve social distancing.

For every 100 seats on an aircraft, 30 seats will be occupied to ensure a safe distance is kept between passengers. That will increase the cost of travel and will impact the profitability of airlines. Gordhan adds:

“In many cases, it is predicted that something between 18 and 36 months is what we’re talking about, making slightly less for domestic travel in some countries. International travel, on the kind of scale we’ve seen before, we won’t be anywhere near [that].

He said international travel will be a “slow starter”. Several airlines from across the globe are affected; planes ordered before COVID-19 was declared a pandemic will not be delivered.

Comair down

This follows after embattled airline Comair, which operates British Airways in South Africa, on Tuesday 5 May announced that it had entered a voluntary bankruptcy protection process.

Comair was already under financial strain before. On 26 March, the airline was forced to halt operations after reporting a half-year loss of R564 million for the first half of 2020. Comair Chief Executive Wrenelle Stander

“These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs. The only responsible decision is to apply for business rescue.”