South African Airways is currently in “business rescue,” meaning that the airline is supposed to restructure due to huge losses that leave the airline on the brink of liquidation.
I was skeptical about whether things could actually be different this time around, and the government was serious about a turnaround plan. Well, it appears that they are, based on what has just been announced.
In this post:
South African Airways route cuts
Obviously some major cuts are needed to South African Airways’ network to keep them in business. Up until this point the airline had temporarily suspended some routes to conserve cash.
The airline has now taken it a step further by announcing a bunch of permanent route cuts. These changes are significant. This comes as the airline is also trying to sell nine of their A340s, in an effort to reduce costs.
South African Airways notes that those on canceled services will receive a refund, and those on canceled domestic flights will be accommodated on Mango.
The airline also doesn’t intend to make any further significant network changes beyond what is listed below.
International route cuts
As of February 29, 2020, South African Airways will end a bunch of international services, including regional and long haul.
Within Africa, the airline will be ending service from Johannesburg to the following four destinations:
- Abidjan via Accra
- Entebbe
- Luanda
- Ndola
In terms of intercontinental routes, the airline will be ending service from Johannesburg to the following four destinations:
- Guangzhou
- Hong kong
- Munich
- Sao Paulo
This means that within Africa, South African Airways will continue to operate flights to:
- Blantyre
- Dar es Salaam
- Harare
- Kinshasa
- Lagos
- Lilongwe
- Lusaka
- Maputo
- Mauritius
- Nairobi
- Victoria Falls
- Livingston
- Windhoek
In terms of intercontinental routes, the airline will continue to operate routes to:
- Frankfurt
- London Heathrow
- New York JFK
- Perth
- Washington Dulles (via Accra)
In other words, they are cutting service to eight of their 26 international destinations, if my math is right.
Domestic route cuts
As of February 29, 2020, South African Airways will exclusively operate flights between Johannesburg and Cape Town, but on a reduced basis.
All other domestic flights will cease to be operated by SAA, including flights to Durban, East London, and Port Elizabeth.
Domestic routes operated by low cost carrier Mango will not be affected by these changes.
In fairness, SAA “mainline” never operated that many domestic routes. This is still significant, but it’s not like they’re canceling hundreds of daily flights here.
What happens to jobs at SAA?
Avoiding layoffs as much as possible has been a priority for the company. However, realistically speaking the company needed to reduce their workforce before these changes were made, and with all of these route cuts, it’ll be even more necessary to lay off some employees.
Following these route cuts, the company is saying that “every effort is being taken to limit the impact of job losses in SAA and its subsidiaries.”
Those behind the business rescue have stated the following:
“It is our intention to restructure the business in a manner that we can retain as many jobs as possible. This will help provide a platform to a viable and sustainable future. However, a reduction in the number of employees will unfortunately be necessary.”
As of now no details have been announced for how they plan to go about layoffs, other than saying that they’ll be engaging the labor groups for solutions.
Bottom line
While layoffs are never fun, the reality is that SAA is finally taking the necessary steps to reduce losses. the airline has been losing money for years, and realistically radical measures are needed to turn the company around.
I was skeptical about whether the “business rescue” would actually be taken seriously, or if it would just be business as usual, as we’ve seen at so many state owned airlines. Based on these cuts, it looks like the airline is serious.
What do you make of SAA’s huge route cuts?
South Arica's Ministry of Public Enterprises has issued a statement following the restructuring of South African Airways’ route network announced yesterday. It will be making representations to the Business Rescue Practitioners and asking that the route network decisions be reviewed.
One of the ‘features’ of Business Rescue is the ability to rescue & transform a company without interference from government or ministers.
Often businesses need to shrink before they can grow -...
South Arica's Ministry of Public Enterprises has issued a statement following the restructuring of South African Airways’ route network announced yesterday. It will be making representations to the Business Rescue Practitioners and asking that the route network decisions be reviewed.
One of the ‘features’ of Business Rescue is the ability to rescue & transform a company without interference from government or ministers.
Often businesses need to shrink before they can grow - this happened at Iberia, going from making a loss to making decent profits.
*route
It would be nice if you provided information for travelers that are affected by these rate cuts.
Hope Airlink flights to Nelspruit are not effected, I have a flight there in a couple of months.
This is what happens when people turn a blind eye to mismanagement, corruption and child like behavior. Sad.
What I find astonishing is that the previous chair of SAA Dudu Myeni has still not been locked up
Somewhat interesting in that this represents an almost total pull out of Francophone Africa, Lusophone countries, and really most non-English speaking destinations. I think every remaining country is anglophone save Kinshasa, Maputo, and Frankfurt.
I'm mildly interested in what this means for other state carriers on the continent as well and whether this shows the way forward. KQ has had apparently massive losses again and despite nationalization coming up, Kenya definitely does not have even...
Somewhat interesting in that this represents an almost total pull out of Francophone Africa, Lusophone countries, and really most non-English speaking destinations. I think every remaining country is anglophone save Kinshasa, Maputo, and Frankfurt.
I'm mildly interested in what this means for other state carriers on the continent as well and whether this shows the way forward. KQ has had apparently massive losses again and despite nationalization coming up, Kenya definitely does not have even close to the capacity to provide the same sort of massive bailout to their national carrier if it continues.
According to Airlink Press Release:
06/02/2020, JOHANNESBURG – Airlink, the privately-run South African airline, will operate services linking Johannesburg with Port Elizabeth, Entebbe, Ndola and Luanda after 29 February 2020, even though its franchise partner, SAA, will stop serving those destinations from that date.
“We want to reassure travellers that as far as Airlink is concerned, it is business as usual! Our schedule and operations are unaffected by SAA’s latest network cuts,” said Rodger...
According to Airlink Press Release:
06/02/2020, JOHANNESBURG – Airlink, the privately-run South African airline, will operate services linking Johannesburg with Port Elizabeth, Entebbe, Ndola and Luanda after 29 February 2020, even though its franchise partner, SAA, will stop serving those destinations from that date.
“We want to reassure travellers that as far as Airlink is concerned, it is business as usual! Our schedule and operations are unaffected by SAA’s latest network cuts,” said Rodger Foster, Airlink CEO and Managing Director.
For those wondering about Airlink, the situation is quite complex.
Airlink is independent of SAA and is profitable. However, they are owed nearly $50m by SAA for flying already performed prior to December, which is now not being paid to them because of the business rescue process.
As a result, despite the profitability, Airlink has been placed in a cash flow crunch. It is not expected to be immediately detrimental, but they are pursuing legal...
For those wondering about Airlink, the situation is quite complex.
Airlink is independent of SAA and is profitable. However, they are owed nearly $50m by SAA for flying already performed prior to December, which is now not being paid to them because of the business rescue process.
As a result, despite the profitability, Airlink has been placed in a cash flow crunch. It is not expected to be immediately detrimental, but they are pursuing legal options to ensure this doesn't affect their operations in the medium term future.
Airlink continues to operate all its planned flights under the SA code for now (until May), and all flights performed since December are being settled by the administrator on an ongoing basis for now.
PS -
As more informed readers remark/advise, it seems SA Airlink not affected. Good. They operate some of my favorite vacation routes, top of list Vic Falls - Cape Town.
Frequent flyer, not airline, typo.
The airline needs the rescue, as painful as it will be for them. It was their only option. As several have asked, I'm curious about SA Airlink (especially Nelspruit, gateway to Kruger) and future redemptions on Mango.
And who's going to buy A340's?
That said, I'm oneworld FF, and I suspect BA Comair will be a big winner as it all shakes out.
PS - Livingstone has the "e" in the spelling...just a small thing
@David - SA Airlink is a private, extremely well managed and profitable airline. Except for sharing a booking platform and frequent airline program they have little to do with SAA.
@Peter Brown - sorry to be the bearer of bad news but SAA is going nowhere. They will emerge from this a leaner, more efficient airline and they will return to profitability. Back in 2011, before the looting and mismanagement started, they made a profit of almost R 1B despite using inefficient aircraft and having a route network that made little sense. If you think they are going under you are greatly mistaken. The business...
@Peter Brown - sorry to be the bearer of bad news but SAA is going nowhere. They will emerge from this a leaner, more efficient airline and they will return to profitability. Back in 2011, before the looting and mismanagement started, they made a profit of almost R 1B despite using inefficient aircraft and having a route network that made little sense. If you think they are going under you are greatly mistaken. The business rescue process is the best thing that could have happened to them. The business rescue practitioners are doing a sterling job, if a turnaround was impossible they would have liquidated the airline already.
Are JNB-EBB flights currently operated by Airlink included in the cuts, or are they separate entities?
I am scheduled JNB to EBB on Feb 26 and returning on March 12
I see it is SA Airlink??
Maybe not cancelled, but maybe Airlink bankrupt also from above.
Get the agony over with. Bankruptcy is the only alternative.
@aniro if the best service you've had on a plane is on SAA, then you need to get out some more.
@Aniro - You made me laugh! I've had okay service flying SAA business class. I've also had to ask an attendant from the other aisle for a wine refill, and I've had to request silverware after being delivered a totally random dinner tray that bore little resemblance to my request (different flights). In my experience, SAA service makes AA look good, and that's saying a lot.
I've always had excellent service on SAA (and usually in economy) the crew are always kind and very professional. I'm glad the London and Frankfurt routes are staying, I'd always choose them over BA or Lufthansa (although probably not over Virgin).
Frequent flyer from Gru to JNB. I’m going to miss SAA. But LATAM has upgraded so I’ll try that.
While not the best hard product in business, I much prefer the open seats as here old Qatar and Turkish to the herringbone coffins, and the Best service I have had on a plane is on SAA.
And Airlink is seeking permission for the courts to sue SAA for around $50 million in tickets that SAA have sold on behalf of Airlink. In most cases Airlink have already flown the PAX but have not received payment from SAA (who sell the tickets on behalf of Airlink as part of their strategic alliance). If Airlink does not recover this money, the CEO has said that their survival is under threat and that they...
And Airlink is seeking permission for the courts to sue SAA for around $50 million in tickets that SAA have sold on behalf of Airlink. In most cases Airlink have already flown the PAX but have not received payment from SAA (who sell the tickets on behalf of Airlink as part of their strategic alliance). If Airlink does not recover this money, the CEO has said that their survival is under threat and that they will run out of cash within weeks. Airlink operate a fleet of 53 aircraft to 38 (mainly) regional destinations.
@stogieguy7 - SAA has actually not been operating to Entebbe for the better part of a year now. That route has been operated by Airlink using an E190.
Surprised to see Entebbe on that list. When I was in Uganda, there were quite a few business connections between that nation and SA. But, I guess that not enough people were paying enough to travel between the two. With that link gone, it would seem like the options are more limited to get from there to anywhere in English speaking southeastern and southern Africa.
@JoAnn - SAA doesn't fly to either MQP or HDS. Those flights are operated by SA Express and Airlink.
@JoAnn -- the Nelspruit flights are all SA Airlink... don't think those are impacted by this reduction; separate corp.
Crazy that the flights to Hoedspruit and Nelspruit are being cut. As far as I can see that's the only flights in the country to get to Kruger.
@Matthew - No change in JNB-ACC-IAD route. They pulled out of Dakar in September last year already.
Sad to see SAA leaving GRU, my first intercontinental flight. But also explains LATAM going daily with the A350 on the same route...
ACC or DKR?
I'm booked next month.
Have the domestic JNB - CPT cuts shown up yet when looking to book? I have flights to book for April.
Any idea what will happen with partner award tickets for domestic flights? I have a domestic connection in March on one of the canceled routes. As far as I know, Mango is not part of Star Alliance. Also there is the issue of them not having business class (not that it really matters on such a short flight).
FWIW - Haven't been notified by UA or SA yet and they are still selling tickets.