SAA at risk of going under as companies lose faith in the airline

SAA at risk of going under as companies lose faith in the airline

- Sanlam’s Travel Insurance Consultants have withdrawn their insolvency cover from SAA

- Flight Centre Travel Group has stopped selling SAA tickets

- South African Airlines is facing it's toughest challenge yet and may get its wings clipped

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SAA is in serious trouble and things are getting worse as companies start to ditch the airline. Flight Centre Travel Group has stopped selling tickets for SAA, cutting them off from one of SA's biggest travel companies.

Briefly.co.za learned that Sanlam’s Travel Insurance Consultants unit has also pulled the plug and has withdrawn SAA from its insolvency cover.

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Without the backing of insurance cover and ticket sales, SAA is set loose revenue that it cannot afford at this moment.

The last time SAA made a profit was in 2011 and has received R57bn in bailouts since 1994.

The company is at the edge of a financial abyss and the recent strike action has compounded the airline's failure to publish its financial statements in October and was not able to pay workers their full salaries in November according to fin24.com.

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Public Enterprises Minister Pravin Gordhan is working on a plan to save the airline and make it profitable again, while Finance Minister Tito Mboweni would rather pull the plug and shut the airline down.

However, despite calls from Parliament’s tourism committee to keep the airline in operation, the grim reality is that the government may not be able to find the money to save SAA as the country's economy stagnates and other state-owned entities are calling for bailouts.

Earlier today Briefly.co.za reported on a plan to save the airline by merging it with Ethiopian Airlines, a successful African airline which would create an opportunity to develop a West African travel hub.

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Source: Briefly.co.za

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