South African Airways’ (SAA) board will place the national carrier under business rescue, a significant shift in attitude from earlier statements by the government that it remains open for business. Local media reports indicate that president Cyril Ramaphosa told ministers, deputy ministers and the cabinet secretary in an unofficially circulated letter that SAA will have to go into voluntary business rescue. “This is the only viable route open to the government to avoid an uncontrolled implosion of the national airline,” Ramphosa's letter reads. Meanwhile, the country's cabinet secretary Cassius Lubisi was also quoted as saying: “The voluntary business rescue approach will also prevent liquidation applications by any of SAA’s creditors, which would land the airline in an even worse position.” The decision has not been made public but the department of public enterprises is expected to make an announcement soon. Under Chapter 6 of South Africa’s Companies Act, companies in financial distress may be appointed a business rescue practitioner to manage and restructure the company. The aim is to increase its chances of survival or secure a better return for creditors in the event of liquidation, while offering the company some legal protection during the restructuring process. SAA has received multiple cash injections from the state coffers, widely reported as R57 billion ($3.9 billion) since 1994. Just days ago, the same department said the loss-making airline will undergo extensive restructuring, having run out of alternative strategies. The last straw appears to be strikes in recent weeks, which caused “immense danger” to the carrier’s reputation and operations, and contributed to a deterioration in its financial position, the department added. "SAA is determined to remain open for business," it said then. "Management is also committed to ensure financial sustainability going forward." Cirium fleets data shows that the carrier has 45 aircraft in its in-service fleet, comprising seven Airbus A319s, 10 A320s, 11 A330s, 14 A340s, one A350, and two Boeing 737s. It has six other aircraft in storage – three aged A340s, and three A350s with an average age of less than one year old.

Source: FlightGlobal

Indonesia has called for the dismissal of national airline Garuda Indonesia’s chief executive for allegedly smuggling items on an Airbus A330-900 fresh off the production line. Speaking at a press conference on 5 December, the minister for state-owned enterprises Erick Thohir ordered the dismissal of Garuda Indonesia's chief executive Ari Askhara, over an alleged attempt to smuggle a motorcycle into the country via the delivery of its first Airbus A330-900 in November. Thohir did not spell out Askhara's name but specified that the individual was the chief executive of Garuda, initials "AA". He explains that he received a letter from its board of commissioners, as well as a report from Garuda's audit committee, whose report indicated that there was "additional testimony" to support claims that the motorcycle belongs to "AA." "The [financial] transfer process was made in Jakarta to the personal [bank] account of Garuda's finance manager in Amsterdam. Mr "IJ" had assisted in the shipping and its processes, and in other [matters] too." Thohir did not specify who "IJ" was or what his role was in the carrier. He indicates that there will be further investigations, and the smuggling attempt is likely to lead to a civil and criminal case, as it "caused losses to the country." Despite his order for Askhara's dismissal, Thohir stresses that the dismissal will be done "in a procedural manner," as the carrier is listed on the Indonesia Stock Exchange. This means that the dismissal is likely to be tabled at an extraordinary shareholder's meeting, and Cirium data shows that Jakarta owns a 60.5% stake in Garuda. Garuda could not be reached for comments on Askhara's dismissal. The order for Askhara's dismissal comes after the head of public affairs at Indonesia's customs and excise directorate general, Deni Surjantoro, was quoted in a 2 December CNBC Indonesia report as saying that when Garuda's first A330-900 arrived in Jakarta on 17 November after a ferry flight from Toulouse, 18 boxes were stored on the aircraft. Out of the 18 boxes, 15 contained used parts of a Harley Davidson motorbike, while the remaining three contained two brand new Brompton bicycles. Garuda explained in a 3 December press release that the cargo and personal belongings transported by the A330neo was declared to the Indonesian customs authorities and was cleared by its French counterparts prior to departing France. No issues were raised during the Indonesian custom's inspection of the cockpit and passenger cabin, but motorcycle spare parts were later found during a baggage inspection. The airline goes on to state that the spare parts were reported to customs officers for processing, and were intended for the personal use by one of its employees which it did not identify.

Source: FlightGlobal

Norwegian has sold its Argentinian subsidiary to Chilean low-cost carrier JetSmart for an undisclosed amount, as the Scandinavian group looks to cut costs and focus on core operations. "As Norwegian moves from growth to profitability, we are taking all the necessary actions required to ensure that Norwegian is well-positioned going forward," states acting chief executive and finance chief Geir Karlsen. Control of Norwegian Air Argentina's operations have been transferred with immediate effect. Norwegian's three Boeing 737s are not included in the deal. They will return to Europe over the next six months and be replaced with JetSmart Airbus A320s. "Over the past few months we have made important changes to our route network to ensure long-term profitability," states Karlsen. "Attaining satisfactory profitability for a relatively small domestic operation has proved difficult to achieve, given the overall situation in the country." Profitability was also hampered by rapid devaluation of the Argentinian peso, creating a significant gap between the subsidiary's earnings and its dollar-denominated costs. JetSmart will continue to operate Norwegian Air Argentina's scheduled flights from Buenos Aires Aeroparque airport. However, the unit's branding is to be phased out over the coming months. The enlarged JetSmart group will control around 10% of the domestic market and will be the third-largest operator in the country. "We are very excited about the opportunity to combine Norwegian Argentina with our current JetSmart operations," states chief executive Estuardo Ortiz. "JetSmart has a long-term commitment to Argentina as well as of our vision of becoming the leading ultra-low-cost airline in South America. With this transaction we will continue providing affordable air travel to our customers both from Aeroparque and El Palomar airports." All of Norwegian Air Argentina's flights are domestic, and the sale will not impact Norwegian's long-haul flights from London to Buenos Aires, which are operated by Norwegian Air UK. Norwegian Air Argentina began operations in October 2018 with a fleet of three Boeing 737-800s. It operated 20 daily flights across eight routes between Aeroparque airport and Bariloche, Cordoba, Iguazu, Jujuy, Mendoza, Neuquen, Salta and Ushuaia. Separately, Norwegian has disclosed the appointment of Marty St George as interim chief commercial officer. St George has more than 30 years' industry experience. Until recently, he served as commercial chief at JetBlue Airways, having previously held positions at United Airlines and US Airways. Helga Bollmann Leknes, who had been serving as commercial chief, "has decided to leave the company after two years, following changes in Norwegian's top management team", says the airline.

Source: FlightGlobal