South African Airways is poised to cut close to 20% of its workforce as part of an effort to restructure the heavily loss-making carrier.
The airline employs nearly 5,150 personnel but says it has started a consultation process after embarking on an overhaul which “may lead to job losses”.
SAA puts the number of positions potentially affected at 944.
“We urgently need to address the ongoing loss-making position that has subsisted over the past years,” says acting chief Zuks Ramasia.
She says the restructuring is intended to smooth the implementation of an accelerated turnaround strategy.
SAA has been long mired in financial difficulties, with debt and liquidity problems, and insufficient revenue generation.
“[Our] balance sheet has historically been weak and remains so despite recent substantial capital injections from the government,” says Ramasia.
“Our continued losses and reliance on government guarantees to borrow money from lenders, have increased the interest costs which impacts the operating cost of the business.”
The restructuring will cover all internal SAA divisions but will not include the Mango Airlines subsidiary or the maintenance arm SAA Technical.
SAA says the consultation process could last until 11 January. It says it will aim to “minimise” the number of retrenchments and mitigate their effects.
“These hard decisions were necessary to put SAA on a more sustainable footing while ensuring we continue to offer customers the best service,” says Ramasia.
Source: FlightGlobal