While the president announced that restrictions on international flights are to be eased in the coming weeks, it’s still unclear what South African Airways (SAA) will look like in a post lockdown world.
Despite the constant assurances by government that SAA will survive the restructuring process in a stronger position, there is still no clear idea of how the carrier’s transformation is to be funded in a way that will be sustainable.
SAA business rescue
As previously reported, the South African national airline is haemorrhaging money with inflated staff costs, debts and overheads. To save the airline, government instituted a business rescue process to try and find a solution.
This business rescue process has been problematic in and of itself with the government, business rescue practitioners and trade unions in disagreement about the way forward at the airline.
Friday saw the Department of Public Enterprises once again commit to prioritising the finalisation of the business rescue plan. In addition, the department is still assessing interest from the private sector for investments that would create a new restructured SAA.
According to the department, there have been 20 expressions of interest from private sector funders, private equity investors and partner looking to be part of a restructured SAA.
Gov missed SACCA and NUMSA deadline
Presumably, the expressions of interest have not been entirely to the satisfaction of the department with still no progress being announced in securing a partner.
Indeed the current state of the airline is likely to put the department in a week position in any negotiations where the interests of the trade unions will also need to be considered.
The government this week past missed a deadline from unions SACCA and NUMSA to secure the R10.4 billion that would be required to begin the restructuring process. The unions have acknowledged the government’s efforts.
Still, they have threatened protest action next week should their list seven demands to the government, including the demand for the R10.4 billion in funding, be met. The department is yet to respond publically to the trade unions demands.
The department has however once again reiterated that liquidation of the airline was not being considered. The president has on multiple occasions stressed that liquidation of the airline was undesirable due to billions of rands of government-guaranteed loans held by the airline.
‘We have every right to be angry’
On Friday, National Union of Metalworkers of South Africa (Numsa) and South African Cabin Crew Association (Sacca) threatened to bring the country to a halt if their demands are not met.
Members from both unions gathered outside SAA’s headquarters in Kempton Park, Johannesburg and handed over a joint memorandum of demands to the Department of Public Enterprises (DPE).
“We have every right to be angry. There is nothing left…Those who stole from SAA should be the ones to pay […] If you don’t respond to our demands, we are going to make this country ungovernable, and it’s not just us – the working class is angry, and they’ve got good reason to be angry”.
Read more here: SAA crisis: Unions threaten to make country ‘ungovernable’
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