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.
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
In terms of intercontinental routes, the airline will be ending service from Johannesburg to the following four destinations:
- Hong kong
- Sao Paulo
This means that within Africa, South African Airways will continue to operate flights to:
- Dar es Salaam
- Victoria Falls
In terms of intercontinental routes, the airline will continue to operate routes to:
- London Heathrow
- New York JFK
- 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.
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?