Home South African SAA faces wind-down or liquidation, rescue team says

SAA faces wind-down or liquidation, rescue team says


No funds available to rescue the airline.

JOHANNESBURG, April 23 (Reuters) – Specialists appointed to try to save state-owned South African Airways (SAA) said on Thursday that they had no further funds for rescue efforts and that the two remaining options were a wind-down process or placing the company into liquidation.

The wind-down process is dependent on employees accepting the termination of their employment by mutual consent within a given time frame, the specialists said in a notice to affected parties seen by Reuters.

Meanwhile, SAA unions have slammed the government for saying that they have agreed that job losses were unavoidable as a solution for saving the airline.

This comes after the Department of Public Enterprises (DPE) issued a statement saying the unions had agreed that some jobs would be lost at SAA, and that the employees who remain behind would need to sacrifice some of the unaffordable arrangements that had worsened the airline’s financial position.

The National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) said yesterday that the government’s statement was “unfortunate and one-sided” over the matter.

The unions have flatly rejected the collective agreement from SAA business rescue practitioners for mass retrenchments at the airline.

In a joint statement, Numsa and Sacca said they had made it clear in their engagement with the DPE that national fiscus would continue to play a role in making sure that the future of SAA was secured.

“We advanced views on how workers’ jobs must be secured and how workers in the transitional phase of us building the proposed restructured airline should be cushioned,” they said.

“In the past, we have had several long-term protracted engagements with the SAA board and the shareholder in a bid to save the airline, even before the business rescue process started.

“Unfortunately, these engagements lacked the openness and honesty required to avert the current calamity that SAA currently finds itself in.”

The airline’s business practitioners have proposed the termination of SAA’s entire workforce of 4700 workers by the end of April in exchange for unguaranteed severance packages after DPE Minister Pravin Gordhan declined their request for R10billion funding.

In a statement, the DPE said that it was agreed that social plans would be developed to cushion the effect of losing jobs on the affected employees.

However, the unions would have none of it, but committed to the consultation process and continued to engage until an agreement about the future of the airline was reached.

“If we are to undertake another effort to save SAA, we need all parties to engage in good faith and respect the need for transparency, alignment and honesty,” they said.

“If we are all to work together to save SAA, we have to take care of the small but important matters such as releasing media statements that reflect the discussions or the resolutions of a meeting.”

Labour law expert Michael Bagraim said there might have been some consensus between the parties, but the unions might still need to consult with their members.

“I believe that the unions and the government have come to an agreement.

“However, the unions have not consulted with their membership,” Bagraim said.

“The reality is that the leadership understands the problem is that the members have been traumatised.

“The members were assured that they would not be retrenched.”


– Reuters