March 26, 2020 / 5:41 PM / 13 days ago

UPDATE 1-Coronavirus delays South African Airways rescue plan to May

* SAA under form of bankruptcy protection

* Coronavirus complicates rescue efforts

* Creditors authorise extension for turnaround plan

* Administrators see demand in cargo business (Adds Dongwana comments, acting CEO retirement)

By Alexander Winning

JOHANNESBURG, March 26 (Reuters) - South African Airways’ creditors have approved a two-month rescue plan delay, its administrators said on Thursday, adding there was cargo business demand despite the coronavirus crisis.

State-owned SAA is fighting for its survival after entering a form of bankruptcy protection in December and receiving more than 20 billion rand ($1.1 billion) in bailouts in the past three years..

The specialists appointed to try to save the airline requested an extension for their rescue plan last week to give them time to analyse the impact of the coronavirus pandemic and hold talks with trade unions over potential job cuts.

“A further extension for the publication of the plan from 31 March 2020 to 29 May 2020 has been approved by the requisite majority of the creditors,” they said in a letter seen by Reuters on Thursday.

SAA, which has not made a profit since 2011, said last week that it would suspend intercontinental and African regional flights until the end of May because of the coronavirus.

It has also suspended domestic flights during a 21-day nationwide lockdown ordered by President Cyril Ramaphosa to try to contain the spread of coronavirus.

Siviwe Dongwana, one of the specialists overseeing rescue efforts, said SAA had paid March salaries in full on Thursday and that it would seek to capitalise on any emergency charter opportunities during the lockdown starting at midnight.

“Notwithstanding the lockdown there is increased demand in the cargo business,” Dongwana said.

Separately, SAA said that its acting chief executive, Zuks Ramasia, would take early retirement from mid-April. Ramasia took the role after her predecessor resigned last year, citing a lack of state funding and too much bureaucracy. ($1 = 17.4748 rand) (Reporting by Alexander Winning; Editing by Jan Harvey and Alexander Smith)

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