A financial crisis at South African Airways deepened Tuesday as a funding squeeze forced the national carrier to cancel several domestic and international flights. Eight flights between Johannesburg and Cape Town will be cut this week, and 20 between Johannesburg and Durban, the carrier said in an emailed statement. It also canceled 10 flights between Johannesburg and Munich, Bloomberg News reported. The move is “in line with SAA’s usual policy of reviewing flights and consolidating services with low demand,” and is aimed at saving money, the carrier said.
Less than a month into 2020, South African companies have already announced thousands of job cuts. In a country where a third of the labor force is already unemployed, this will put even more strain on demand and economic growth, Bloomberg News reported. Almost 6,000 jobs are at risk as companies including Telkom SA SOC Ltd., the country’s largest fixed-line operator, and Walmart Inc.’s local unit Massmart Holdings Ltd. plan to reduce their headcount after slumps in earnings. That’s after Sibanye Gold Ltd.
South Africa’s Public Enterprises Ministry said on Sunday it was talking with the Treasury to raise funds to rescue South African Airways (SAA), following a meeting with business rescue specialists at the weekend, Reuters reported. The airline is one of several state entities, including power company Eskom, struggling with debt after nearly a decade of mismanagement. Their woes are seen as the single greatest threat to Africa’s most industrialised economy and have been largely responsible for bringing South Africa’s credit rating to the brink of junk.
South Africa is scrambling to secure extra funding to rescue South African Airways (SAA), which last month entered a form of bankruptcy protection in a last-ditch bid to save the state-owned company and around 10,000 related jobs, Reuters reported. Tito Mboweni, the country’s finance minister, told business leaders in Johannesburg ahead of the World Economic Forum annual meeting in Davos next week that the Treasury had provided “financial support to the best of our abilities”.
State-owned South African Airways (SAA) urgently needs the government to provide the 2 billion rand it promised the airline last month or it could have to suspend some flights and delay salary payments, a senior trade union official said on Wednesday, Reuters reported. SAA entered a form of bankruptcy protection last month in an effort to rescue the company and 10,000 related jobs. At the time it was promised 2 billion rand from the government and 2 billion rand from lenders.
State-owned power producer Eskom Holdings SOC Ltd. will be the “death knell” for South Africa’s mining industry unless the government enables mines to produce their own electricity, according to Exxaro Resources Ltd. Chief Executive Officer Mxolisi Mgojo, Bloomberg News reported. “The current state of Eskom is going to be the one thing that is going to be the death knell of this industry,” Mgojo said at a conference organized by Business Unity South Africa, the country’s largest business lobby group, on Tuesday. “Without fixing Eskom we don’t have a mining industry.
The chairman of Eskom Holdings SOC Ltd. resigned from his post after the South African power utility resumed rolling blackouts earlier than expected in 2020, Bloomberg News reported. Jabu Mabuza tendered his resignation on Friday and “apologized for Eskom’s inability” to meet a commitment it made to President Cyril Ramaphosa to avoid power cuts until Jan. 13, the presidency said in a statement. After implementing the most severe supply reductions to date in December, Eskom pledged at a Dec. 11 meeting to avoid further outages over South Africa’s traditional holiday season.
Eskom Holdings SOC Ltd.’s Chief Executive Officer Andre de Ruyter started his role at South Africa’s indebted utility on Monday. De Ruyter is the first permanent leader of Eskom since the end of July, when Phakamani Hadebe stepped down, citing health reasons, Bloomberg News reported. He began work at the company’s headquarters in Johannesburg, an Eskom spokeswoman said in a reply to questions. The state-owned utility is set to be restructured to turn the loss-making business around and try to emerge from 450 billion rand ($31.4 billion) of debt.
Growing problems at South Africa’s state-owned enterprises are pushing major companies toward bankruptcy and subjecting the continent’s most developed economy to rolling blackouts that are choking growth, The Wall Street Journal reported. Earlier in December, flagship carrier South African Airways narrowly avoided collapse after the government loaned it 2 billion South African rand ($137 million) and ordered a restructuring.
A South African telecoms company backed by investment firm Remgro plans to expand its high-speed broadband network after completing a 16 billion rand ($1 billion) debt restructuring this week, Reuters reported. The building of fiber optic networks in upmarket neighborhoods has intensified in the past five years, but has been confined to cities due to the high cost of laying down the infrastructure and the dominance of mobile internet.