South African Airways (SAA) is undergoing a “radical restructure” as it goes into a bankruptcy protection scheme in a bid to avoid going bust.
A new statement from Pravin Gordhan, minister for the department of public enterprises, said the decision to place the national airline into “business rescue” is being fully supported by the government.
The procedure is used in South Africa to try to turn around a company that is in serious trouble and sees a business rescue practitioner appointed to run and restructure the business while the airline continues operations normally.
Gordhan said: “This is the optimal mechanism to restore confidence in SAA and to safeguard the good assets of SAA and help to restructure and reposition the entity into one that is stronger, more sustainable and able to grow and attract an equity partner.
“Our desire is that the restructured airline will mark the beginning of a new era in South African aviation and must be able to bring in millions more tourists into SA, help create more jobs in tourism and related sectors of the economy and work with other African airlines to underpin and service the integration of African markets and improve dramatically intra-African trade and travel.
“It is also important that the reliance on government finances be reduced as soon as possible and to minimise disruption to SAA services, customers, staff and other stakeholders.”