South African Airways has started the process of laying off its entire 4,700 workforce after attempts to save the 86-year-old airline look to have faltered.
Administrators for the flag carrier have concluded that a rescue is not unlikely, according to a report by Bloomberg News.
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Bloomberg says the airline has been unable to get the South African government to agree to more financial support and it has offered severance deals to staff from the end of this month.
South African Airways has been struggling financially for many years and has been relying on government bail outs having last made a profit in 2011.
The airline was put into bankruptcy protection last December but the COVID-19 crisis has only worsened its finances and Bloomberg said the pandemic could “prove the final nail in the coffin”.
Bloomberg reported the South African Department of Public Enterprises as saying:
“There are discussions with the unions on alternatives to the current South African Airways business model, success of the business rescue process, and the best possible outcome for the airlines employees.”
Staff were said to have been offered one-week pay for each year of service and that will depend on the successful disposal of assets such as real estate.
