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South African Airways cancels flights in fight for survival

By Alexander Winning

JOHANNESBURG (Reuters) – South African Airways (SAA) has cancelled some domestic flights between its Johannesburg hub and Cape Town and Durban, and some international flights to Munich, the state airline said on Tuesday, as it fights for its survival.

SAA is running short of cash after the government failed to provide 2 billion rand ($137 million) of emergency funding it promised when the airline entered a form of bankruptcy protection last month.

“These cancellations represent a responsible strategy to conserve cash and optimise the airline’s position,” SAA said in a statement, adding that it was working to accommodate affected customers on other flights.

“SAA will be reviewing further possible flight schedule amendments over the coming days.”

The airline is one of several South African state entities, including power company Eskom, mired in financial crisis after nearly a decade of mismanagement.

State companies’ financial problems are seen as one of the biggest threats to Africa’s most industrialised economy and have helped push the country’s credit rating to the brink of junk status.

SAA said flight cancellations on the domestic and Munich routes were planned until Friday.

A booking system used by travel agents showed that 19 SAA flights had been cancelled so far, according to a representative of a local travel agent.

The airline’s business rescue practitioners held talks with the government at the weekend to try to find a solution on the promised funding, but failed to reach a breakthrough.

On Sunday, the public enterprises ministry said it was still talking with the National Treasury to raise funds for SAA.

Last week, a senior trade union official said SAA might have to suspend some flights and delay salary payments if the government didn’t come up with a plan to provide the 2 billion rand soon.

($1 = 14.5682 rand)

(Reporting by Alexander Winning; Editing by Jason Neely and Barbara Lewis)

FILE PHOTO: South African Airways (SAA) plane taxis after landing at O.R. Tambo International Airport in Johannesburg

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