South African Airways is bleeding the equivalent of just over 30 million kronor every day. The strike that has been going on for almost a week has put the airline on the brink of bankruptcy.
Founded in 1934, the state-owned airline is now history. At least according to one of South African Airways' board members. In an interview with Reuters, Martin Kingston admits that without further government guarantees, the company could soon be forced to file for bankruptcy and be liquidated.
”"We may not have enough financial resources to pay salaries at the end of the month. We are looking into what we can do but we need immediate help," Kingston said in the interview.
The background is the strike regarding wages and cuts that is now in its sixth day.
The unions have demanded an eight percent wage increase, while South African Airways has offered 5.9 percent.
Many analysts also see little chance of relief. Over the past three years, South African Airways has received almost SEK 13 billion in government aid but has still not managed to get out of its difficult situation. The company has not been able to show a profit since 2011 and has not published any financial statements for the past two years.
The chances of another airline buying South African Airways, which is part of the same airline alliance as SAS, are also considered small. The company operates on a less profitable route network. While, for example, companies in the Middle East have achieved success by becoming a link for flights from Asia to Europe/USA and vice versa, South African Airways' geographical connection is a negative burden.
A bankruptcy would also be a costly affair for the South African state, more precisely around SEK 16 billion, according to Reuters.
Source: TT
