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South African Airways (SAA) is set to lay off all of its employees at the end of April.
A document detailing the airline’s severance package, obtained by Bloomberg, shows that 4,700 employees will leave the company by the end of this month. The collapsing airline will reportedly make sales of its assets to foot the salary pay-outs. According to the Mail&Guardian, the document shared with employees stated that:
“…the company will make payment of the severance packages to employees on a monthly basis, over a period of six months, once the sale of assets [has] been concluded.”
These assets include the sale of two night slots at London Heathrow airport.
The decision to fire all staff comes after the South African Government declined to provide more funds for rescue efforts. The South African government earlier this week told administrators that it wouldn't provide more funds, lending guarantees or allow foreign financing of a business rescue plan.
The coronavirus pandemic has affected several airlines over the past few months. Reduced schedules and grounded fleets mean that airlines are rapidly bleeding through money while they weather the pandemic. However, many carriers have been able to acquire government bailouts to cushion the financial blow. Unfortunately for South African Airways, this will not be an option.
The SAA entered a form of bankruptcy protection in December, and has since had to suspend all its passenger flights due to the COVID-19 pandemic that has left the world's aviation industry in jeopardy.
Even before the pandemic however, SAA was already reducing routes and considering job cuts.
In a turbulent decade for the carrier, at least nine chief executive officers were brought in to try and change its course, all with little success.
SAA is among several state-owned companies to have become technically insolvent without financial assistance from the South African government, following years of mismanagement and corruption scandals -- particularly under the presidency of Jacob Zuma, which ended in 2018.