South African Airways to get state-led rescue package

South African Airways on Thursday was placed under a state-led rescue plan as part of a restructuring process after a week-long strike was held last month.

“The Board of SAA has adopted a resolution to place the company into business rescue,” said a statement by South Africa’s Public Enterprises Minister Pravin Gordhan.

“This decision is supported by the government.”

Thousands of South African Airways (SAA) staff walked out on November 15 after the cash-strapped airline failed to meet a string of demands, including higher wages and job in-sourcing.

The strike was called off the following week after the SAA board and unions eventually reached a deal.

But the walkout was a severe blow for the debt-ridden airline, which has failed to make a profit since 2011 and survives on government bailouts.

SAA’s board said the business rescue, scheduled to start immediately, was decided after consultations with shareholders and the public enterprises department “to find a solution to our company’s well-documented financial challenges”.

“The considered and unanimous conclusion has been to place the company into business rescue in order to create a better return for the company’s creditors and shareholders,” SAA spokesman Tlali Tlali said in a statement.