Johannesburg - South African Airways (SAA) said on Thursday that it would try to operate a new provisional timetable, after its board of directors adopted a resolution to place the company into a business rescue process at the earliest opportunity.
SAA said in a statement that the business rescue process sought to minimise the destruction of value across its subsidiaries and provide the best prospects for "selected activities within the group to continue operating successfully".
It added that services operated by its subsidiary Mango Airlines would continue as usual, despite the business rescue process.
In a statement, SAA said the board and the executive committee had been in consultations with the shareholder - the Department of Public Enterprises - in an effort to find a solution to the company’s financial challenges.
"The considered and unanimous conclusion has been to place the company into business rescue in order to create a better return for the company’s creditors and shareholders, than would result from any other available solution," it said.
SAA said it was seeking to minimise the destruction of value across its subsidiaries and provide the best prospects for selected activities within the group to continue operating successfully.
It acknowledged the decision presented many challenges and uncertainties for its staff, adding that it would engage in targeted communication and support for all employee groups.
"SAA will endeavour to operate a new provisional timetable and will publish details shortly," the airline said, adding the board would also announce the appointment of business practitioners in the near future.
A separate statement from secretary of the cabinet Cassius Lubisi dated Wednesday said a decision had been made that SAA would have to urgently go into voluntary business rescue, abandoning cabinet's earlier approach that entailed the restructuring of the carrier.
"After discussions with various stakeholders including potential lenders, developments have now necessitated a change of approach to the SAA conundrum," Lubusi said in a letter to government ministers and their deputies.
"(Business rescue) is the only viable route open to the government to avoid an uncontrolled implosion of the national airline," the letter stated, adding that the approach would also prevent liquidation applications by an of the airline's creditors, which would land it in an even worse position.