South African Airways crisis deepens with flight cancellations

Cape Town

THE financial crisis at South African Airways deepened on Tuesday with one of the country's largest travel agencies announcing that the airline had cancelled several domestic and international flights.

"We are in the process of contacting our customers to advise and assist," Flight Centre Travel Group Ltd said on Twitter. It didn't provide further details. As many as 19 flights may have been cut, News24 cited Flight Centre as saying.

The national carrier, which was placed into bankruptcy protection last month, is waiting for the government to fulfil a pledge to provide it with a two billion rand (S$186 million) financial lifeline that will enable it to keep flying. The Ministry of Public Enterprises, which oversees SAA, said work is still under way to raise the money.

SAA offers flights to more than 30 domestic and international destinations. It has posted losses since 2012 as it grapples with the high operating costs of an ageing, inefficient jet fleet and a bloated workforce - as well as high taxes, political interference and corruption scandals.

While SAA's Johannesburg base is a major international destination, its position at the southern end of the continent means it lacks the potential to become a major hub. The scope for profitable regional flights is limited by the relative poverty of neighbouring countries.

Efforts to establish a wider African business have had limited success as global giants including Dubai-based Emirates Airline and Turkish Airlines add dozens of sub-Saharan destinations; and Ethiopian Airlines, the continent's biggest carrier, turns Addis Ababa into a major hub. BLOOMBERG