South African Airways collapses with new airline to be formed

The Department of Public Enterprises said that the new airline would ideally have a mix of governmental and private ownership.

SAA, which is 86 years old, which has recorded no profit since 2011, is heavily indebted and only survived thanks to regular cash injections from the state. Over the past three years, more than $1.1 billion have been injected into the company.

In terms of the agreement, the government will source 2.2 billion Rand (105 million euros) funding for severance packages.

The government warned the 5,200 people currently employed by SAA that sacrifices would need to be made. 

The National Transport Movement (NTM) president, Mashudu Raphetha said: “It is a very sad day for the whole of the Republic that South African Airways is now going to shut down and we are now going to witness the emergence of the new airline.”