The South African Government has officially moved to shut down South African Airways and form a new national airline.
SABC News reported that an agreement between airline unions and government officials has been reached.
In a statement, the Department of Public Enterprises said that the new airline would ideally have a mix of governmental and private ownership.
The president of the National Transport Movement, Mashudu Rephetha, said that negotiations with the government are progressing well.
“It is a very sad day for the whole of the Republic that SAA is now going to shut down and we are now going to witness the emergence of the new airline.”
Mashudu Rephetha, President, National Transport Movement
The move will result in all employees’ contracts being terminated; however, ex-SAA employees will be given employment priority in the new airline.
It is understood that a 2.2 billion Rand ($117 million) severance package will be created for laid-off staff.
In a statement provided to Bloomberg, the Public Enterprises Minister, Pravin Gordhan, expressed optimism for the future of commercial aviation in South Africa.
“The old SAA is dead, there is no doubt about that, but what will take its place may be some or all of the old SAA and maybe some other airlines too.”
Pravin Gordhan, Public Enterprises Minister, South Africa
The union representing SAA flight attendants are reportedly taking the airline to court; in an attempt to block the entrenchment process, according to eNCA News.
This is a developing story. More to come.
Article Sources: SABC News, eNCA, and Bloomberg. Feature Image: Flickr/byeangel