South African Airways To Stop flying Into Malawi
One of Africa’s largest airline South African Airways (SAA) has plans to stop flying into Malawi following its decision to dump some of its routes in a desperate bid to save itself from collapse.
The dumping of some of its routes, is among several of the airline’s strategies to stay aloft with other strategies including reducing flights and getting rid of some of its airplanes.
SAA, which is the South African national carrier, is currently faced with a severe debt crisis, having its operating capital exhausted and is owing suppliers almost R750 million. South African government is currently putting together a plan to rescue the airline.
South African newspaper Rapport reported that sources familiar with the plan to try to rescue the airline have disclosed that among the proposals in the rescue plan include: Reducing flights on the Johannesburg-Cape Town route by more than a third; cancel all flights to Port Elizabeth and East London, as well as flights to all central African destinations; get rid of at least 10 of the more than 50 planes in its fleet; and cut back its already reduced international flight offering.
The African destinations that be dumped completely are Blantyre and Lilongwe, Brazzaville in the Republic of the Congo, Kigali in Rwanda and Libreville in Gabon.
“The airline is going to make enormous sacrifices to try to ensure SAA’s survival,” Rapport quoted one of the sources familiar with the plan.
News24 reported that the plan is to introduce the new flight schedule in October. But before that happens, loans of R6.785 billion will first have to be repaid. The South African Government has, however, guaranteed these loans.
The loans in question were supposed to have been paid back in April, but this deadline was extended twice after representations were made to creditors. South Africa’s Finance Minister Malusi Gigaba had asked for another extension, but one of the creditors, Citibank, which is owed R1.761 billion, has refused.
According to a memorandum that Gigaba presented to Cabinet, defaulting on the loan will mean that the airline will immediately become liable for a further R7.8 billion, which would otherwise only have been payable in tranches in 2019 and 2022.
The South Africa Cabinet has since discussed the crisis to come up with the best way forward.
With SAA cancelling its flights into Malawi, it means that apart from Malawian Airlines there will be no any other direct flight from Malawi to South Africa, a development that analysts have expressed fears that might lead to an increase in air fares despite the Malawi route already being one of the most expensive in the region.