Administrators for South Africa\u2019s loss-making state airline have defended their decision to cut routes as part of a turnaround plan, after objections from President Cyril Ramaphosa, government and labor unions.<\/p>\n
South African Airways will halt service to nine international cities, including Hong Kong and Sao Paulo, and cease all local services except those between Johannesburg and Cape Town.<\/p>\n
The move is \u201cin the best interests of SAA,\u201d joint administrators Les Matuson and Siviwe Dongwana said in an emailed statement Sunday.<\/p>\n
\u201cThey are intended to make the airline commercially and operationally sustainable, free from the requirement of future funding from the government post the implementation of the restructure,\u201d the administrators said.<\/p>\n
The Sunday Times reported that South African banks have refused to provide an R8 billion ($531 million) loan to enable a turnaround even if the government guaranteed the funding.<\/p>\n
A loan offer by an international bank with links to the US and UK was rejected because it was too low, according to the newspaper.<\/p>\n
#On Friday, Ramaphosa said the government disagreed with the decision to cut almost all domestic routes because the carrier is an \u201ceconomic enabler\u201d that allows people to move around the country.<\/p>\n
Public Enterprises Minister Pravin Gordhan said the government would propose the cuts be reviewed as they may jeopardize SAA\u2019s long-term future.<\/p>\n
The administrators said they would engage with stakeholders and include their input in a final business rescue plan due at the end of the month.<\/p>\n
They took control of the carrier in December after it was placed into a local form of bankruptcy to try to end a cycle of regular state bailouts and battles with creditors.<\/p>\n