State-owned airline South African Airways recently announced a restructuring process that could severely impact employees. The airline is mired in debt despite the government’s several bailout attempts.
South African Airways has informed the entire workforce about its restructuring process which might result in job losses. The restructuring could affect 944 of the airline’s 5,146 employees with job losses, the local media reported.
The airline said in a statement that it has informed all its 5,146 employees about the restructuring process which may impact current jobs.
According to local media reports, Finance Minister Tito Mboweni announced that the government would reimburse the airline’s $844 million debt over the next three years.
South African Airways has faced various challenges including insufficient revenue, volatile fuel prices, and mounting debt. The airline’s CEO Zuks Ramasia said it would be difficult to provide the scale of restructuring. However, the estimated number is that 944 employees might be affected.
South African Airways former CEO Dudu Myeni accused of illegal practices and company mismanagement. Over the last 13 years, the airline has incurred more than $1.9 billion in cumulative losses. It even received 5.5 billion-rand lifeline to extend maturities on outstanding debt but failed to make an affordable repayable plan with creditors.
“We urgently need to address the ongoing loss-making position that has subsisted over the past years,” acting Chief Executive Officer Zuks Ramasia told the local media. “That is why we are undergoing a restructuring process that seeks to ensure effective implementation of the accelerated long-term turnaround strategy amid the present prevailing operational challenges.”
The country is struggling to get its state-owned companies back on track after years of corruption and mismanagement under former President Jacob Zuma.