Despite the allure of South Africa’s tourism industry, its national carrier, South African Airways (SAA) has been reeling in serious financial crisis.
Reports indicate that for the last nine years, SAA has not made a single coin in profits and went into bankruptcy protection in 2019.
Ethiopian Airlines has now come in and is currently in talks to rescue SAA, reports Reuters.
“Some discussion is taking place between ET and the South African Public Enterprises Ministry,” Tewolde Gebremariam, the head of Ethiopian Airlines adding that “but it is at a very initial level and part of a general overview of pan-African cooperation in the aviation world between ET and SAA.”
With the talks commencing, creditors have given a nod to the new plan but the South African government is required to provide a sum of 10 billion rand ($580 million) to implement this whole restructuring plan.
All through to August, SAA planes have remained aground and not flown commercial passengers since March when COVID-19 pandemic struck hard.
Just like other airlines across the industry, Ethiopian Airlines also made losses of $1 billion under the same period but is upbeat things could look up gradually.
SAA’s bankruptcy deals South Africa’s tourism industry a huge blow as it is a leading destination for international tourists in Southern Africa and among the industry’s top players in Africa.
In 2018, South Africa received 16.44 million tourists, a figure that had been projected to grow to 19.6 million by the end of 2023.
The huge number of tourists is a representation of millions of dollars that South African gets in foreign exchange from the tourism industry but this could be reversed by SAA’s ultimate crippling.