Airlines News

South African Airways cancels flights to save cash

Short on cash, South African Airways (SAA) canceled some 40 flights this week. After the government failed to deliver emergency funding, it promised when the state-owned airline entered bankruptcy.

Most of the cancellations are on domestic routes. The cancellations will run between January 20 and 24.

South African Airways says that the affected passengers will be refunded or booked on alternate flights. The company did not rule out the possibility of more cancellations over the next few days.

The news was not a surprise in South Africa after the government missed the deadline to deliver the funds over the weekend. The South African government pledged $138 million in funding to the struggling carrier.

Unions have already warned of the possibility of another strike due to missing wages and that there would be further cancellations and delays.

The 138 million dollars, so far, have not arrived, and the company is on the verge of collapse, which would mean the destruction of some 10,000 jobs.

The government is scrambling to secure additional sources of capital for the airline, the finance minister said.

With critical structural problems in strategic sectors such as electricity generation, very high fiscal spending, and weak economic growth (estimated at 0.5% for 2019), South Africa risks falling into junk bond status this year.