The business rescue process currently in effect at South African Airways (SAA) is now in crisis, according to a report by the City Press.
Following the business rescue practitioners’ release of a statement regarding flight cancellations and route cuts, talks between the practitioners and unions erupted into chaos, with some labour representatives walking out of the meeting.
According to the report, one of the unions is considering taking legal action against the practitioners.
The practitioners reportedly first asked unions for support regarding job cuts early last week, without giving any details regarding which employees would be retrenched.
The unions refused, and shortly after the start of a follow-up meeting on Thursday, they learnt that the practitioners had released a statement announcing flight and job cuts.
The workers’ committee said it had not been consulted about this beforehand, and reacted with anger to the sudden announcement by the practitioners.
Representatives reportedly received calls from SAA employees who wanted to know whether they would be affected by the job cuts.
It should be noted, however, that if creditors such as SA Airlink and Comair vote against implementing the practitioners’ plan, the practitioners will be able to fight their decision in court on the basis that it is against the best interests of the airline.
Massive flight cuts
The business rescue practitioners recently announced a number of initiatives to support the airline’s turnaround plan.
These include cutting a large number of flights to improve profitability as well as reducing the number of employees.
“In line with SAA’s commitment to take urgent action to conserve cash, and create a viable platform for a successful future, key measures need to be implemented now,” the practitioners said.
“These measures include targeted changes to the route network, deployment of more fuel-efficient aircraft, optimisation of organisational structures and renegotiation of key contracts with suppliers.”
“On the domestic route network, SAA will continue to serve Cape Town on a reduced basis.”
“All other domestic destinations, including Durban, East London and Port Elizabeth, will cease to be operated by SAA on 29th February 2020.”
These changes are in addition to the removal of a number of international and regional flight routes.
SAA does not intend to make any further significant network changes, and the practitioners said that passengers and travel agents can therefore feel confident about booking future travel with South African Airways.