The South African government National Transport Movement (NTM), has said a decision to shut down embattled national carrier South African Airways (SAA) and form a new airline has been reached.
In a statement, the Department of Public Enterprises (DPE) said that the new airline would ideally have a mix of governmental and private ownership.
In terms of the agreement, the government will source R2.2bn ($119.7m) funding for severance packages.
The decision will result in the termination of all SAA staff contracts. Current SAA employees will be given preference for employment in the new airline.
The National Transport Movement (NTM) president, Mashudu Raphetha said:“It is a very sad day for the whole of the Republic that South African Airways is now going to shut down and we are now going to witness the emergence of the new airline.”
The union representing SAA flight attendants and the National Union of Metalworkers of South Africa are reportedly taking the airline to court; in an attempt to block the entrenchment process.