South Africa's government is to undertake an extensive restructuring of South African Airways, insisting that it has run out of alternative strategies for the troubled flag-carrier. The country's department of public enterprises says the loss-making airline has been through "difficult challenges" in the past few years and particularly during the last few weeks – which have included industrial action from two unions. These strikes caused "immense damage" to the carrier's reputation and operations, and contributed to a deterioration in its financial position, the department adds. "SAA, therefore, cannot continue in its current form," it states. "The airline group will now go through a radical restructuring process which will ensure its financial and operational sustainability. "There is no other way forward." The department has not detailed the nature or full extent of the overhaul but says "various options" are being considered. But it says that, over the past few days, there have been "intense discussions" with the airline's lenders to secure funds necessary to cover an operational and structural transition over the coming months. "The [government] is committed to a viable, sustainable, profitable national airline," adds the department. "It is our collective responsibility as South Africans to support SAA in its efforts to restore sales confidence among its customer base and rebuild revenues in the shortest possible time." SAA has been attempting to implement a long-term turnaround plan, and has received several packages of government financial support to aid with liquidity. But the carrier has continued to turn in substantial losses and it has been hampered further by turmoil in its senior management, with multiple changes of chief executive over the last decade. "SAA is determined to remain open for business," says the department. "Management is also committed to ensure financial sustainability going forward." It adds that the board intends to take "bold initiatives" to increase SAA's market share and "intensify" marketing campaigns in an effort to rebuild confidence in the ailing carrier.

Source: FlightGlobal

Czech carrier Smartwings is to wet-lease four Boeing 737-800s to the Middle Eastern operator Flydubai, to help offset a capacity loss from the 737 Max grounding. Flydubai states that it has finalised an agreement to lease the four -800s from Smartwings for the period from 14 December this year to 25 January 2020. The jets will provide additional capacity during the busy seasonal travel period, says Flydubai, which has 40 737-800s – as well as 14 737 Max jets grounded since March. Chief executive Ghaith Al Ghaith says the disruption caused by the grounding has been "significant", forcing a 30% cut in its schedule. "These four additional aircraft will enable more passengers to have more options to travel during the holiday season," he adds. The all-economy jets will operate to destinations including Bahrain, Kuwait, Karachi and Muscat.

Source: FlightGlobal

Lufthansa's German flight-attendant union UFO is threatening industrial action after talks in preparation for an arbitration process broke down for the second time this month. UFO says Lufthansa prematurely withdrew from the discussions on 27 November, two days after they began. The union's deputy chief, Daniel Flohr, said during a webcast today that the two sides had agreed on all but "0.01%" of topics. But he complains that Lufthansa provided no "binding legal security" regarding previous action by the airline against himself, UFO chief Sylvia De La Cruz, and the union's former chief, Nicoley Baublies, who is involved in the negotiations as a "representative". While wage negotiations between Lufthansa and UFO have been going on for some time, the dispute escalated in 2018 after the union's selection of De La Cruz and Flohr as leaders. Lufthansa questioned the legality of that selection, and in August 2019 disclosed that it had asked the Hessian state labour court to review UFO's trade-union status. On 22 November – following the breakdown of the first arbitration attempt – Lufthansa said it would withdraw the legal action as "a signal of de-escalation" and to "open up solution areas in a difficult, deadlocked situation". However, Flohr insists that the search for a solution will not be pursued "without knowing where we stand legally". Lufthansa has declined to comment on its stance toward the three union figures, arguing that "individual contractual arrangements cannot be connected with the question of whether or not a tariff arbitration process is launched". In a separate statement, the airline says it is open to a "comprehensive" arbitration process that covers issues at subsidiaries Eurowings, Germanwings and CityLine, even if UFO does not commit to a "peace obligation" at these operators during the process. Lufthansa withdrew from the previous arbitration attempt – agreed in principle for the German mainline – because, it said, UFO had not committed to a peace obligation at the three subsidiaries or the Frankfurt-based operation of SunExpress, its leisure joint venture with Turkish Airlines. The two sides have agreed to proceed with a "small" arbitration process that covers only pay issues at Lufthansa's mainline.

Souce: FlightGlobal