Passengers board a South African Airways plane at the Port Elizabeth International Airport in the Eastern Cape province, South Africa, September 30, 2018. REUTERS/Siphiwe Sibeko/File Photo
JOHANNESBURG (Reuters) – South African President Cyril Ramaphosa said on Friday that his government did not agree with plans to cut some of struggling South African Airways’ (SAA) domestic routes at the end of the month.
State-owned SAA entered a form of bankruptcy protection in December and is fighting for its survival.
Specialists appointed to try to rescue SAA said on Thursday that SAA would cease flights to Durban, East London and Port Elizabeth from Feb. 29 as part of efforts to conserve cash and make the airline more attractive to potential equity partners.
SAA flights to Cape Town will continue on a reduced basis, the specialists said.
“We are not in agreement with what the rescue practitioners have come up with, that domestic flights should be cancelled. We want to find out what the rationale is,” Ramaphosa said in comments broadcast on state television channel SABC.
“We want to have a discussion with them (the business rescue team), because SAA is not only a great symbol for the country, but it is also an economic enabler.”
Under South African company law, the business rescue team is entitled to take decisions that are deemed necessary to turn a distressed company around, so in theory it can ignore Ramaphosa’s objections.
SAA is among several South African state entities including power company Eskom that are mired in financial crisis after nearly a decade of mismanagement. SAA hasn’t made a profit since 2011 and has received more than 20 billion rand ($1.3 billion)in bailouts over the last three years.
($1 = 15.0810 rand)
Reporting by Alexander Winning; Editing by Tim Cocks and Susan Fenton
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