The South African government will inject $ 10 billion, or nearly $ 640 million, into state-owned South African Airways (SAA) to save it from disaster. On the other hand, this rescue plan will leave four-fifths of the staff on the floor and the fleet drastically reduced.
President Cyril Ramaphosa made it an imperative, a matter of national pride. The South African flag, an 86-year-old company, had to be rescued at all costs.
We now know this price: $ 640 million, a staff reduced to the maximum, to 1000 employees against 5000 previously. And a fleet growing from 44 to six aircraft. South African Airways (SAA),in bankruptcy proceedings for almost a year, stopped for several weeks, will survive, but will not soon regain its former glory.
“Trapped by years of incompetence and corruption”
The company, which has not made a profit for ten years, had become the symbol of corruption in the years of the Jacob Zuma regime, “cut off from years of incompetence and corruption” to use words from a former Deputy Director General.
The rescue of the company cost an intense battle within the government between the Ministry of Public Enterprises and the Ministry of Finance. The government is divided in its attitude to public companies, almost all in debt. Cyril Ramaphosaa also warned ten days ago that they should tighten their belts.
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