South Africa’s government will place the national airline under a local form of bankruptcy protection as a last-ditch measure to try and prevent its total collapse.
State-owned South African Airways is entering a business-rescue process to allow a “radical restructuring” under which the carrier will receive 4 billion rand ($274 million) in funding, Public Enterprises Minister Pravin Gordhan said in a statement Thursday. The process will allow SAA to continue operating.
SAA, which last made a profit in 2011 and has received 57 billion rand in bailouts since 1994, has been struggling to pay its bills after the National Treasury balked at providing it with more funding.
Its finances took a further hit when staff staged a pay strike last month, grounding a number of flights and causing bookings to be canceled on a number of others.
South Africa’s Companies Act enables firms in financial distress to file for business rescue.