South Africa’s Nationwide is latest airline to fail
30.04.08
Troubled South African airline Nationwide has cancelled its entire schedule after encountering cash flow problems. It joins a growing list of airline casualties in recent weeks of record fuel prices and the current economic crisis, which includes Eos, ATA and Frontier Airlines.
The airline has faced problems since November 2007 when one of its Boeing 737 planes taking off from Cape Town lost an engine. The airline was subsequently forced to ground its fleet after its licence to maintain its fleet was rescinded by the South African civil aviation authorities. Nationwide resumed operations a month later, but the problems had a significant impact on passenger loads at a busy time of year for the airline.
CEO Vernon Bricknell said: ‘Our cash flow has become critical and as a result have decided to voluntarily cease all flight operations until further notice. In the months of December and January we resumed operations and attained a gradual recovery of the business. However, in the months of March and April we faced a 30% increase in fuel costs coupled with a decrease in passenger load factors.’
Founded in 1991, at the end of February black economic empowerment group African General Equity said it would acquire a 51% stake in the airline, which operated around 50 domestic and international flights a day from the country, including four times weekly flights to Gatwick from Johannesburg.
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