Aviation expert says it may be the end of the road for SAA
Written by Lethiwe Mdluli on 21 April, 2020
An aviation expert says whatever slim chance the South African Airways business rescue practitioners had of saving the airline has been wiped out by the coronavirus pandemic.
The practitioners have put a draft severance package proposal on the table for the embattled airline.
Editor of SA Flyer Magazine, Guy Leitch, says most taxpayers welcome the prospect of no longer being slowly bled by SAA, but there is a huge cost in closing it down.
“It should also be born in mind that government has infact failed to provide any of the funding they promised SAA since the beginning of the business rescue process. Even before the COVID-19 epidemic government had no ability or will to continue to fund SAA. Therefore I think the conclusion has to be that this is indeed the end of the road for SAA because it has run out of funds to pay salaries pay leases or even to put fuel in its tanks therefore the creditors will be demanding liquidation.”
Meanwhile Unions Numsa and Sacca have rejected the proposal by the South African Airways’ business rescue practitioners to retrench workers.
The practitioners are proposing terminating the employment of the airline’s entire workforce by the end of the month after government denied SAA an additional 10 billion-rand bailout.
The proposal offers severance packages to its 4700 staff.
Sacca’s, Zazi Nsibanyoni-Mugambi, says they believe that SAA can be saved.
“Since December we still dont have a business rescue plan and because now they want a further 10 billion now they come up with this draft agreement that in essence SAA must liquidate and assets must be sold. We do not buy into that particular agreement we think its a horrific that its actually even suggested without them having consulted stakeholders in terms of an actual business plan.”
By: Gagasi FM News