South African Airways will undergo restructuring as a result of its finances spiralling downward in recent weeks. South African Airways’ extensive restructuring process is expected to re-establish financial and operational stability, according to media reports.
South African Airways is a state-owned flag carrier. South African Public Enterprises Minister Pravin Gordhan, said in a statement that, “The airline group will now need to go through a radical restructuring process which will ensure its financial and operational sustainability. There’s no other way forward.”
The airline has experienced tremendous amount of losses in the past few years. With that, it is in no position to increase productivity without a restructuring process, the local media said. South African Airways has not released its financial statements in two years, pointing toward liquidation, if necessary actions are not taken.
However, the airline is determined to carry on business operations, with the management committed to create financial stability. In October, Ethiopian Airlines’ Chief Executive Officer Tewolde Gebremariam said that the airline was keen to acquire a stake in South African Airlines, the local media reported. But the joint venture between the two airlines has been stalled.
Industry experts believe that South African Airlines should downsize its workforce. But this would create conflict with unions who are determined to fight job cuts.
The recent strike by The National Union of Metal Workers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) had affected the South African Airlines reputation, operations and finances. However, the government is considering various possibilities to resolve the airline’s evolving issues and make it viable.