Durban - Cash-strapped South African Airways (SAA) announced that the board of directors has adopted a resolution to place the company into business rescue at the earliest opportunity.
On Thursday, the SAA board of directors and the executive committee have been in consultations with the shareholder, the Department of Public Enterprises (DPE), in an effort to find a solution to the company’s well-documented financial challenges.
SAA Spokesperson Tlali Tlali said 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.
"Furthermore, the company is seeking to minimize the destruction of value across its subsidiaries and provide the best prospects for selected activities within the group to continue operating successfully. We understand that this decision presents many challenges and uncertainties for its staff. The company will engage in targeted communication and support for all employee groups at this difficult time,"Tlali said.
He added that SAA will endeavour to operate a new provisional timetable and will publish details shortly.
Tlali said the company appreciates the continued support of both its customers and partners in the travel industry around the world.
"The Board of Directors will also announce the appointment of business practitioners in the near future. It is important to point out that services operated by SAA’s subsidiary airline, Mango, will continue as usual and as scheduled,"Tlali said.
Struggling state-owned airline South African Airways (SAA) lost more than R10.4 billion in the past two financial years, documents sent to lawmakers and seen by Reuters showed.
SAA, which has not made a profit since 2011 and is dependent on government bailouts to remain solvent, suffered a crippling strike last month which pushed it to the brink of collapse.
A copy of an SAA financial report for the year ending in March 2018 showed a R5.4 billion loss, with the company's liabilities exceeding its assets by around R13 billion.