SAA to cut flights after R3.5bn Development Bank bailout
Johannesburg - Cash-strapped state carrier South African Airways (SAA) said on Thursday it would "cancel and consolidate selected flights" to lower costs, days after it received a 3.5 billion rand ($244 million) government bailout to ease a mounting cash-flow crunch.
The government bailout from state-owned Development Bank of Southern Africa (DBSA) was announced on Tuesday. The treasury had initially promised a 2 billion rand rescue package, but that funding had stalled when Finance Minister Tito Mboweni insisted it be done in a way that avoids increasing the budget deficit.
Apart from the DBSA loan, SAA has also received bridging loans from commercial creditors.
SAA is fighting for its survival after it entered a form of bankruptcy protection in December and cancelled some flights because of cash shortages. The carrier has not made a profit since 2011.
"Flight demand has been scrutinised to ensure SAA is running efficient flights. To this end, SAA will cancel and consolidate selected scheduled flights where there is low demand based on current forward bookings for the month of February," the airline said in a statement.
"The conservation of cash through various cost reduction measures is critical to running an efficient airline and to create a platform on which a future for a restructured entity can be built," SAA added.
A spokesman for the company did not answer requests for details on the number of flights that could be cut.Reuters