SAA to undergo ‘radical restructuring’: Gordhan

01 December 2019 - 18:59
By Matthew Savides
SAA will have to undergo
Image: 123RF/ Jaromír Chalabala SAA will have to undergo "radical restructuring" to stay afloat, public enterprises minister Pravin Gordhan said on Sunday.

Beleaguered national carrier SAA can only be saved by “radical restructuring”, public enterprises minister Pravin Gordhan said on Sunday.

In a statement, the ministry said that the airline could not continue in its current form, and that drastic change was urgently needed.

The recent week-long strike by Numsa and the SA Cabin Crew Association were the final straw, causing “immense damage to the reputation, operations, and the deterioration of the finances of SAA”.

“SAA, therefore, cannot continue in its current form. The airline group will now go through a radical restructuring process which will ensure its financial and operational sustainability. There is no other way forward,” Gordhan said in the statement, issued on Sunday evening.

He said that government backed a national airline, but only if it was “viable, sustainable [and] profitable”.

“In pursuance of this, various options are being explored,” the statement read.

But before this could happen, SAA needed to get funding to keep the business running.

“Over the past few days there has been intense discussions with lenders to secure the necessary funds to cover the operational and structural transition over the next few months.

“It is our collective responsibility as South Africans to support SAA in its efforts to restore sales confidence among its customer base and rebuild revenues in the shortest possible time.

“We therefore reassure customers and encourage them to buy tickets with confidence.

“SAA is determined to remain open for business. Management is also committed to ensure financial sustainability going forward,” the statement read.

Gordhan concluded that marketing campaigns to rebuild lost confidence will be put in place, and the board and management would “take bold initiatives to increase its market share”.