SOUTH AFRICA - SAA HALTS FLIGHTS FOR PORT ELIZABETH AND EAST LONDON AS OF MARCH 1

South African Airways (SAA) would cease its domestic routes for Durban, East London and Port Elizabeth effective March 1, the company's business rescue practitioners (BRPs) said on Thursday.

The embattled airline went into voluntary business rescue in December.

BRPs Les Matuson and Siviwe Dongwana said that in line with SAA’s commitment to take urgent action to conserve cash and create a viable platform for a successful future, key measures need to be implemented "now".

The measures included targeted changes to the route network, deployment of more fuel-efficient aircraft, optimisation of organisational structures and renegotiation of key contracts with suppliers.

“The initiatives we are taking now will strengthen SAA’s business. We believe that this should provide reassurance to our loyal customers that SAA is moving in the right direction. We are focused on our mandate to restore SAA’s commercial health and create an airline that South Africans will be proud of," said the BRPs.

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They said SAA would continue to operate all international services between Johannesburg and Frankfurt, London Heathrow, New York, Perth and Washington via Accra.

Regional services to be retained included those from Johannesburg to Blantyre, Dar es Salaam, Harare, Kinshasa, Lagos, Lilongwe, Lusaka, Maputo, Mauritius, Nairobi, Victoria Falls and Windhoek.

International and regional SAA routes to be closed effective March 1 would be Johannesburg to Abidjan via Accra, Entebbe, Guangzhou, Hong Kong, Livingston, Luanda, Munich, Ndola, and Sao Paulo.

SAA would continue to serve Cape Town "on a reduced basis".

"All other domestic destinations, including Durban, East London and Port Elizabeth, will cease to be operated by SAA on February 29, 2020. Domestic routes operated by Mango will not be affected by the changes," said the BRPs.

"All customers booked on any cancelled international and regional routes will receive a full refund. Customers booked on cancelled domestic flights will be re-accommodated on services operated by Mango."

No other "significant" route changes were expected, according to the BRPs, and the flight schedule for February remained the same. 

To improve the airline's liquidity, rationalisation programmes were underway for SAA's subsidiaries, as as well as the sale of selected assets. "The BRPs will continue to explore viable investment opportunities with potential investors in respect of SAA."

"Every effort" was being made to limit job losses at SAA and its subsidiaries, said the BRPs, and restructuring would be done with a view to job retention. "However, a reduction in the number of employees will unfortunately be necessary.”

The BRPs would engage labour to "reach a solution necessary for a sustainable airline going forward".

"The BRPs wish to underline their support of the president’s proclamation for the Special Investigating Unit to examine some of the airline’s contracts. This measure will help in assessing viable agreements and in reducing SAA’s cost base.

"The decisions and actions announced today are aimed at improving SAA’s balance sheet, creating a platform for a strong and sustainable airline and ensuring that the company is more attractive for potential strategic equity partners."

via - IOL