Ramaphosa must intervene in R10.5-billion SAA bailout – Unions

Unions are asking Ramaphosa to get involved in the process of ensuring SAA gets a R10.5-billion bailout, according to a report by the City Press.

The National Union of Metalworkers of South Africa (NUMSA) and the SA Cabin Crew Association (SACCA) released a joint statement on Saturday which called on Ramaphosa to “call Public Enterprises Minister Pravin Gordhan and Finance Minister Tito Mboweni at Treasury to order”.

They believe it is unfair that workers are being taken “from pillar to post” and that nobody is taking responsibility for the latest failure to keep SAA running.

“When we met with Ramaphosa and the ANC top six at Luthuli House, they gave us the assurance that they supported a restructured SAA that is free of the baggage of the past and is viable,” said the statement.

“The president gave an undertaking to us directly that he supported the turnaround of SAA, so we’re calling on him to keep his promise.”

Government has reportedly made headway on Friday regarding a plan to fund SAA’s business rescue and restructuring, claims the City Press, and Mboweni is expected to make an announcement in this regard next month.

Government to bail out SAA

On Thursday 10 September, SAA’s business rescue practitioners (BRPs) said the airline needed short-term funding from the government in the following week to continue its operations.

“The BRPs have been in engagements with government regarding the procuring of this funding and to date government has advanced approximately R9.3 billion for the repayment the company’s various lenders as set out in the plan,” said the practitioners.

However, the remaining short-term funds that were needed were not yet available, and both SAA and the BRPs were engaging with the government on this issue.

“The BRPs will advise affected persons on 17 September 2020 of the progress of the advancing of the funding,” said the practitioners.

“Should the BRPs not be satisfied that sufficient progress has been made for the timeous advancing of the funding, a meeting of creditors will be convened on 18 September 2020 at 11h00 to engage with affected persons on this issue and the proposed way forward taking into account all relevant factors.”

On 18 September, the Department of Public Enterprises (DPE) confirmed that the government would reprioritise funds to finalise the restructuring of SAA.

“The national carrier will not be liquidated. Because the restructuring process should be brought closer to finalisation in the next few weeks, lending institutions will be requested to finance the restructuring process and honour commitments for voluntary severance packages and retrenchment,” said the DPE.

“The DPE is sympathetic to the plight of SAA employees while continuing to work with other government departments, including the National Treasury, to make sure that the airline’s restructuring plan will be successfully implemented.

In response to this, the unions said it had noted these assurances but was concerned that these words would not translate into action.

“This is not the first time the department of public enterprises and Treasury have missed the deadline for funding to be made available for the business rescue plan,” said the unions.

“We hope that this time, the money will actually materialise.”

The unions also noted that the next seven days are critical because if the government does not provide the money at the next creditors meeting, the liquidation of SAA will be back on the cards.

SAA’s long history of failure

This is not the first time that SAA has needed to be bailed out and restructured.

SAA has gone through several leadership changes and turnaround strategies; however, the national airline continues to require taxpayer bailouts to continue running.

Previous turnaround plans include 2004’s Bambanani – which sought to reduce operating costs by R1.6 billion over three years – 2007’s plan involving turnaround specialists The Seabury Group, and the Long-Term Turnaround Strategy (LTTS) of 2013.

To learn more about the failures of SAA’s numerous turnaround strategies over the past 15 years, click here.

Now read: Comair to cut 400 jobs and de-list from JSE

Latest news

Partner Content

Show comments

Recommended

Share this article
Ramaphosa must intervene in R10.5-billion SAA bailout – Unions