South African Airways on the verge of financial collapse, as unions threaten fresh strike

South African Airways on Wednesday said that it needs a government guarantee to secure a bank loan or the company might enter liquidation, as the workers' strike entered its sixth day. The cash-strapped airline had at the beginning of the strike appealed to the government for support and a possible bailout. However, that isn't likely to happen given the lukewarm response shown by the government.

Double blow for SAA

The standoff between South African Airways and the two major unions over layoffs and wages seem to get solved only though a concrete deal, as the government has said that it has no more money left to bail out the national carrier.

South African Airways
South African Airways YouTube Grab

The company also said that it might not be able to pay salary to thousands of its works next month without a bank funding. The carrier had initiated talks with both the unions on Tuesday but no agreement could be reached. Instead, the unions representing the airlines cabin crew and ground staff threatened to paralyze and shut down the country's entire aviation sector through a secondary strike.

SAA losing millions of dollars daily

The already ailing airline company is losing a minimum $3.4 million daily. This takes the losses to more than $20 million in just six days. However, the loss figures might have come down a bit given that the airline maker partially resumed some of its flights late Tuesday.

South African Airways also said that without a government bailout or a guarantee to secure an immediate bank funding, the airline might have to go ahead with the announcement that the company be liquidated.

South African Airways plane landing
South African Airways YouTube Grab

A gloomy picture

South African Airways is the country's national carrier and the biggest airlines. However, the company has been suffering for quite some time now. A notice and a secondary strike certificate have already been issued to the respective unions of the company's catering service Air Chefs and airline company Comair.

A secondary strike is likely at these two places in the next 48 hours. South African Airlines have time and again been bailed out by the government. The company has received more than $20 million in bailout in phases over the past three years. The bailouts have been saving the airline for a while now, as the company has not registered profit since 2011.