South African Airways releases statement after rumours of shut down or sale

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South African Airways (SAA) has released a statement to “assure all its stakeholders, customers and suppliers of business continuity” after government clarified its position that the airline will not be shut down or sold.

The carrier said it will continue to “render services and honour its obligations towards its customers, partners and suppliers” and the government as a shareholder has not communicated any change in strategy and approach on the future of SAA.

On Monday, 5 November 2018, the shareholder representative, Minister of Public Enterprises, Pravin Gordhan, clarified government’s position that while the airline would continue to operate, there was heightened expectation for SAA to execute on its strategy to restore the airline financially and operationally, with more commitment and a greater sense of urgency.

He indicated the public was losing patience with SAA. Minister Gordhan urged all at SAA to work together with government to prove that SAA can be turned into a good business again.

SAA also said it also welcomed the assurance by President Cyril Ramaphosa in parliament on Tuesday last week that the airline will remain in business, noting government is considering various options, which include the possibility of an equity partner.

The airline continued: “SAA’s strategy implementation is on track and there are ‘green shoots’ that indicate positive results on initiatives already implemented, particularly in the airline’s route network. This follows the implementation of capacity adjustment in the domestic market and network optimization in the regional and international markets.

“Whereas there is more work to be done to implement the strategy, we are encouraged by the progress we are making to turn the company around.

“The airline’s position is that it will take three years to bring the company to a break-even position. However, on the strength of the airline’s current interventions, as well as monitoring how these are implemented, the shareholder decided to provide part of required financial assistance to the airline.

“SAA is an airline of global reach and a strong brand, with presence and operations in all continents. Its suppliers, partners and customers are in various markets across the world and are sensitive to any sentiments that may cast doubt about the future of the airline.

“There is every resolve to address long-standing legacy issues, to improve the performance of the business, to regain its market share and to provide its customers continued and improved service.”