JOHANNESBURG – The embattled South African Airways has begun the process of axing hundreds of workers after it issued a section 189 letter to their employees.
A total of 2 700 SAA workers face the axe after creditors voted in support of the business rescue plan more than a week ago.
The airline has been facing financial woes over the last decade and it last made a profit in 2011.
In the letter, SAA said over the last five years it had accrued losses amounting to R23 billion.
“As you are aware SAA is currently in a business rescue process, which has been the culmination of the numerous financial and business challenges over several years,” reads the letter.
It said the aviation has been severely affected by Covid-19.
SAA has not been spared either as the Covid-19 outbreak led to the airline to reduce its operations.
The letter further adds that the coronavirus has created a lot of uncertainty.
“The business rescue plan was adopted by SAA’s creditors on 14 July. The business rescue plan seeks to restore SAA to profitability through restructuring the airline in terms of the business rescue plan. The business rescue practitioners have contemplated dismissals arising out of SAA’s operational requirements in order to restructure the airline,” says the letter.
“In light of this contemplation the company now invokes all the potentially affected parties and their representatives in a consultation of section 189 of the Labour Relations Act,” says the letter.
The letter comes after the National Treasury had also sent a commitment letter to the business rescue practitioners that funding will be on the way for SAA.
The government wants to give SAA R10.1bn to start its operations again.
However, the official opposition has filed an urgent court application to stop the bailout of SAA.
It said billions of rands have in the past been wasted on SAA, and there was no further requirement for this.