Several South African airlines, already in turmoil, may not pass the coronavirus test.
The regional company South Africa Express (SAX) just announced that it completely stopped its activity from March 18, 2020, “in the light of recent unfavorable developments, including the Covid-19 epidemic”, she said in a statement. All non-essential staff are placed on technical unemployment and clients redirected to other companies.
The decision seemed inevitable due to the financial losses accumulated over the past ten years. They are estimated at more than 1.2 billion rand (60 million euros), despite state aid in September 2019 amounting to 300 million rand (15 million euros). An aid which was to ensure the financial liquidity of the company in order to help it continue its activity.
SAX will now look into the reorganization of its network, but it also announces that it will have to rationalize its activities, without further details.
President Cyril Ramaphosa’s announcement of the border closures on March 15, 2020 sounds like a coup de grace for national aviation. International services are interrupted. And on the regional, it will suffer the absence of customers, including foreign tourists, deprived of visas.
Before the SAX announcement, South African Airways, the country's largest airline, had just announced a severe restructuring plan. The message was clear : restructuring or disappearance.
Thus, almost half of the employees – 2,268 out of 4,708 – should lose their jobs. A rescue plan has been developed. “The current structure negatively affects the efficient functioning of the business and, in turn, its profitability and sustainability”, explains the company. A plan to reduce the fleet from 49 to 18 planes is envisaged and, as a result, fewer destinations will be served.
In the past six years, the state-owned airline has recorded a cumulative loss of 26.1 billion rand (1.3 billion euros). The South African state has continued to potty, without ever being able to redress the situation. And now South African Airways will also have to face the consequences of an epidemic.