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UPDATE 3-South African Airways cancels more flights as funds run dry

Published 20/03/2020, 20:42
Updated 21/03/2020, 20:48

* SAA entered bankruptcy protection in December
* Cancels more flights over coronavirus outbreak
* Rescue team says funds could run dry by end-March

(Adds African flight cancellations)
By Alexander Winning
JOHANNESBURG, March 20 (Reuters) - South African Airways
(SAA) said on Friday it would suspend intercontinental and
African regional flights until the end of May because of the
coronavirus, as administrators trying to save the airline said
it could run out of funds in just over a week.
State-owned SAA has been on the brink of collapse for months
and entered a form of bankruptcy protection in December.
It has not made a profit since 2011 and has received more
than 20 billion rand ($1.2 billion) in bailouts in the past
three years. On Friday it said it would suspend flights on its routes to
the United States, Britain, Germany, Australia and Brazil until
May 31 in response to a government travel ban aimed at stopping
the spread of coronavirus.
SAA said in a later statement that it would suspend flights
to African cities including Accra in Ghana, Lusaka in Zambia,
Harare in Zimbabwe, Windhoek in Namibia, Lagos in Nigeria and
Entebbe in Uganda until the end of May. It said it would
continue domestic services to Cape Town.
This is the second wave of mass cancellations this week,
after SAA said it would cancel 162 intercontinental and African
flights in March and another struggling state-owned airline, SA
Express, suspended operations until further notice from
Wednesday. President Cyril Ramaphosa on Sunday announced bans on travel
to countries considered "high-risk" as regards the coronavirus,
including ones to where SAA flies like the United States,
Britain and Germany.
South Africa has recorded more than 200 confirmed
coronavirus cases but no deaths so far. J8N2AI025
SAA's business rescue team said in a letter to trade unions
that measures taken by governments to control the spread of the
virus had hurt bookings.
"Unless some urgent and drastic measures are implemented
without delay, the situation will deteriorate to such an extent
that it will threaten the very likelihood of the company being
rescued," rescue experts Les Matuson and Siviwe Dongwana wrote
in the letter dated March 19.
Matuson and Dongwana said funds secured to sustain rescue
efforts could run out by March 31, and asked unions to consider
cash-conserving measures like a rotational layoff scheme and
short-time arrangement starting within days.
But one of SAA's largest unions, the National Transport
Movement (NTM), said talks on Friday on the proposals had failed
to reach an agreement. More talks are planned for next week.
NTM president Mashudu Raphetha said the union wanted the
government to agree to another bailout and that SAA could save
money by eradicating bloated tenders and rooting out corruption.

On Friday, Matuson and Dongwana also asked creditors for a
two-month extension for their rescue plan until May 29.
= 17.4460 rand)

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