Insurers shun South African Airways amid financial doubts

As doubts about struggling state-owned South African Airways’ survival grow, two major travel insurance companies have stopped covering tickets issued by the airline.

While the move is unlikely to push the airline into liquidation by itself, it will affect ticket sales and worsen a cash crunch that left the airline unable to pay salaries on time this month.

South Africa Airway has not made a profit since 2011 and has been struggling with an unprofitable network, inefficient planes and a bloated workforce, despite bailouts of more than $1.4 billion over the past three years.

Santam’s Travel Insurance Consultants (TIC) announced this week, that it had stopped its travel supplier insolvency benefit for SAA flights,-after which, Australian agency, Flight Centre Travel Group said it would stop selling SAA tickets. 

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The company that administers Hollard Travel Insurance has also excluded SAA from its travel supplier insolvency coverage, citing the airline’s finances. 

Bryte Insurance’s head of travel, Anrieth Symon declared yesterday, that it had reversed its position on SAA and would cover its flights against insolvency.

The country’s President, Cyril Ramaphosa has stayed out of the tussle so far but the longer he refuses to sign off on guarantees, the more likely it is, that the airline will shut down.

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