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South African Airways Begin Restructuring Plans

The joint Business Rescue Practitioners (BRPs) of
South African Airways (SAA) announced further
initiatives to support the airline’s transformation into
a sustainable and profitable business, the report stated.

South African Airways newsletter discloses that BRPs, Les Matuson and Siviwe Dongwana, have worked closely with key stakeholders, including industry specialists, government, creditors and executive management to develop a comprehensive restructuring programme which will culminate in aBusiness Rescue Plan to be published in lateFebruary and subsequently presented to creditorsy for approval.

In line with SAA’s commitment to take urgent action to conserve cash, and create a viable platform for a successful future, key measures need to be implemented now.
These measures include targeted changes to the
route network, deployment of more fuel-efficient aircraft, optimisation of organisational structures and renegotiation of key contracts with suppliers.

“The initiatives we are taking now will strengthen SAA’s business. We believe that this should provide reassurance to our loyal customers that SAA is
moving in the right direction. We are focused on our mandate to restore SAA’s commercial health and create an airline that South Africans will be
proud of,” commented the BRPs.

The New SAA’s Network

Following a careful analysis of SAA’s liquidity challenges and after consultations with all relevant stakeholders, the BRPs have identified which routes
will be retained to drive the restructured national carrier towards profitability.
SAA will continue to operate all international services between Johannesburg and Frankfurt,
London Heathrow, New York, Perth and Washington via Accra.

Regional services to be retained include from Johannesburg to Blantyre, Dar es Salaam, Harare,
Kinshasa, Lagos, Lilongwe, Lusaka, Maputo, Mauritius, Nairobi, Victoria Falls, Livingston and Windhoek.

SAA will close the following
regional and international services from Johannesburg to Abidjan via Accra, Entebbe,
Guangzhou, Hong Kong, Luanda, Munich, Ndola, and
Sao Paulo on 29th February 2020.

On the domestic route network, SAA will continue to serve Cape Town on a reduced basis. All other domestic destinations, including Durban, East London and Port Elizabeth, will cease to be operated by SAA on 29th February 2020. Domestic routes operated by Mango will not be affected by the changes.

All customers booked on any cancelled international
and regional routes will receive a full refund. Customers booked on cancelled domestic flights
will be re-accommodated on services operated by Mango.

SAA does not intend to make any further significant
network changes. Passengers and travel agents can
therefore feel confident about booking future travel
with South African Airways.
The flight schedule for February remains unchanged.

Assets Improvement

To improve the airline’s liquidity, rationalisation
programmes are under consideration for SAA’s
subsidiaries, as well as the sale of selected assets.
The BRPs will continue to explore viable investment
opportunities with potential investors in respect of
SAA.

Jobs Loss Reduction

The joint BRPs have stated that every effort is being taken to limit the impact of job losses in SAA and its subsidiaries.
“It is our intention to restructure the business in a
manner that we can retain as many jobs as possible. This will help provide a platform to a
viable and sustainable future. However, a reduction in the number of employees will unfortunately be necessary”, said Matuson and Dongwana.

The BRPs will engage labour, both organized and
non-organized, to reach a solution necessary for a
sustainable airline going forward. The decisions and actions announced today are
aimed at improving SAA’s balance sheet, creating a
platform for a strong and sustainable airline and
ensuring that the company is more attractive for
potential strategic equity partners, report stated.

 

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