SAA cuts local and international routes - and SA Express in business rescue

SA Express has been served with an urgent court application to be placed under business rescue.

SA Express said it was considering the contents of the judgment and intended appealing the matter.

Meanwhile, SAA, in business rescue, has scaled back some of its domestic and international routes as from beginning of March.

The Money Show chatted to two aviation experts about he wisdom of the latest developments and what else will need to be done by both entities.

I would have thought the SA Express board of directors would have used the (business rescue) opportunity instead of resisting it.

Joachim Vermooten, transport economist

There was substantial overcapacity for a time. It's one of the only options available.

SAA need to cut costs - its activity levels have to reduce. Cost related issues have to be resolved

That means getting rid of surplus equipment and staff, unfortunately.

Dr. Joachim Vermooten, transport economist

It's not as bad as I anticipated - we were led to believe that. SAA's entire international route was not profitable with the exception of London and New York. It was a long overdue rationalisation of a route network. We're cutting some routes that make a lot of sense. The big surprise though was Sao Paulo.

Guy Leitch, SA Flyer Magazine
Picture: SA Express.

Listen to both interviews below.

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