Letting Troubled South African Airways Go Bust Isn’t So Simple: Here’s Why – Skift


In business, it is a popular refrain: Let the market take care of it.

But for major airlines, that’s not necessarily true. Yes, governments will let second-rate carriers, like Air Berlin, or Monarch Airlines, go bust. But often, governments do not want to lose their nation’s internal transportation system, or air links abroad, so they protect flag carriers no matter how much money the airlines lose.

This is an issue many places, but in few countries is it as dire as in South Africa. The national airline, South African Airways, is government-owned and hemorrhaging cash after six years of operating losses, including a loss of 5.6 billion rand, or about $428 million, in its most recent fiscal year. Moreover, while it’s a solid, safe airline, it has some outdated planes, such as gas-guzzling…

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