The last few years have been brutal in the ever cutthroat airline game. In the last two years, countless low cost carriers have folded amidst immense pressure from mainstream airlines lowering prices to budget airline levels in hopes of squeezing them out.
In the most recent plot twist, it’s legacy airlines which appear to be in major trouble.
South African Airways was just put on “stop sale” by a leading global travel agency, which marks an early warning sign of serious trouble. They’re not the only ones at risk either. Thai and Hong Long Airlines have both encountered serious financial headwinds of late, and in the case of Hong Kong Airlines, they can’t even afford to pay staff at the moment…
Contrary to public perception, travel agents are more useful now than ever. When things go wrong, which they tend to these days more than ever, a travel agent is a single point of contact to get things resolved, and they’re responsible for getting you where you need to be, even if it means finding you a new flight home at no added expense. A key feature in this whole equation
A leading global travel agency has put South African Airways on stop sale, after the underlying “airline failure” insurance for tickets issued on the carrier was dropped. In other words, travel agents are on the hook when travel plans get messed up, and without an insurance and contingency option for the airline, agents have been instructed to to stop selling tickets, with immediate effect.
This is being reported by the airline as a temporary setback while they communicate with the insurance company, but in a week when many have reported bankruptcy and shutdown concerns, it’s the next level of alarm bells ringing.
Business As Usual At South African, For Now
South African Airways has a key global presence, bringing millions of passengers to South Africa annually, as well as shuttling people between Durban, Johannesburg and Cape Town as a primary air travel provider. For now, it’s business as usual for passengers and all flights are going ahead as scheduled.
This is a delicate point for the airline, where consumers obviously become worried about purchasing future fares, which can then further damage the airlines ability to pull itself out of labour dispute and pay issues. The airline needs to come up with over $135 million in short order to keep the status quo. It’s hard to imagine the flag carrier of a growing tourist destination folding, but crazier things have happened.
If you have planned travel with South African, it’s absolutely worth monitoring your reservation and ensuring that you have chargeback options via your credit card, should anything go south. This is yet another reminder to never buy travel with a debit card, which does not offer any chargeback laws if the purchase is never delivered.
If you have points, it could also be worth redeeming for an alternative flight, if your airline offers cheap, free or easy cancellation of a points ticket, where you get all your miles back…
SAA’s problems do not come from LCC competition as your lead paragraph. It comes from cronyism, outright corruption at the top politically-appointed level, massive overstuffing, and a country unable to continue bailing the airline out because it itself has been victimized by corruption, collusion and outright theft by those running it. I’ve had some very good flights and crews on SAA and until last week was booked on a business award in February but decided to cancel the award and buy a revenue ticket on another carrier. I felt it was prudent under the circumstances if I wanted to do this vacation.
SAA’s flights are full and I’ve no qualms on safety reasons. It’s just mismanagement that has drained hundreds of billions year after year from the public treasury. Indeed SAA has faced huge amounts of competition from foreign carriers as tourism grew, but the airline was unable to grow its wide body fleet accordingly. With Cape Town the more attractive tourist city, SAA has no nonstop flight from anywhere outside the country to CPT while BA, EK and half a dozen other airlines fly into it.
The work stoppage earlier this month reflected a myriad of other problems besetting the carrier. I can only conclude quoting the title of Alan Payton’s novel from South Africa of the 1950/60s: Cry the beloved county!
Hong Kong, not “Long.” small typo