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South Africa airline on the road to collapse | Israel today

2019-12-02T18:35:27.857Z


SAA announces it needs $ 136 million immediately to continue operating • Insurance companies will not cover tourism cancellations


SAA airline announced it needed $ 136 million immediately to continue operating • Major insurance companies announced they would not renew insurance on tickets in the event of a breakdown

  • Company employee strike

    Photography:

    AFP

The South African airline, SAA, is in a crisis that could disable its flights. After seven years of no-profits, the company plans to lay off 900 employees, about one-fifth of the 5,150 workforce, in an attempt to survive, while promising pay raises for industrial quiet. The company said it needed $ 136 million immediately to continue operating.

The plan does not receive support from employees who do not trust the company to live up to its promises. The National Company's obsolete fleet still counts fuel-efficient Airbus A340 aircraft, which reduces its ability to compete. Over the past three years, she has received several state loans, totaling $ 1.4 billion, to cover some of the bank debt.

Employees declared a strike from November 8 because of the planned layoffs, resulting in the cancellation of hundreds of flights. The company estimates the strike will cost it $ 3.4 million a day.

Photo: Reuters

But as negotiations with the workers continued, the new blow hit the outside this week. The South African Metal Workers Union announced that SAA is endangering safety by employing inexperienced safety officers and temporary technicians. In response, the company threatened with a libel suit against the union. South Africa's two major insurance companies did not wait for legal clarification or industrial quiet, announcing that they would not renew insurance on company cards in the event of a breakdown, and in the absence of insurance, sales would be further damaged. The halt in sales resulted in the company failing to pay employee salaries this month.

Meanwhile, the large Australian travel company FLT has announced it will stop selling tickets for the South African airline flight. The banks are asking for a state guarantee for a loan that will allow the company to continue operating, but Finance Minister Tito Mbwani refused the request. The only insurance company that has agreed to continue insuring all SAA ticket validity is Bryte.

National airlines in some countries are having difficulties in the era of tough international competition and open skies. Despite the increase in tourism to Thailand, Airways has been facing financial difficulties due to competition with spare companies, and is now looking for a way to return to profitability and continue flying.

In India, due to the cumulative losses, Air India has been offered for sale by the state, but has yet to find a buyer. The company's chances of getting well are low because of low employee efficiency. In Europe, Alitalia's sale has not yet been completed, and the company continues to lose substantial sums each day of operations.

Flagged companies, such as British Airways, Air France that merged with KLM and EL AL, have recovered from crises, and proper management leads them to profitability.

Source: israelhayom

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