SA Express suspends operations over Covid-19

By GENEVIEVE QUINTAL

Ailing state-owned airline SA Express is suspending operations until further notice due to the Covid-19 crisis. The illness is devastating the airline industry globally as travel bans are imposed.

President Cyril Ramaphosa on Sunday declared a national state of disaster and announced sweeping measures which include travel bans to high-risk countries. The ban kicks in on Wednesday.

SA Express flies locally and regionally, but with fears over the virus spreading people are opting out of traveling. The airline was placed in business rescue in February after failing to settle its debt of R11m to global logistics firm Ziegler. It is the second state-owned airline to befall this fate.

The airline said its decision to halt operations over the virus would affect customers and staff. All noncritical staff will be placed on compulsory leave.

The company will use this time to review its current network and streamline operation for improved efficiency, it said. Earlier in March, the government put a halt to business rescue practitioners’ plans to ground the ailing state airline.

In September 2019, SA Express received a government bailout of R300m to ease its operational and financial challenges. In 2018, it was granted a R1.2bn guarantee, which the airline said was swallowed by historical debt.

At a meeting at the National Economic Development and Labour Council on Monday after the president’s declaration of a national state of disaster, SA’s business community proposed cutting funding to noncritical state-owned enterprises such as SAA and SA Express, as a means to shift resources to the country’s response to coronavirus.

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