(3 minutes read)
The cash strapped South African Airways postponed its resumption of flights again
· It announced that all domestic, regional and international flights will not happen until April 30 and October 30 respectively and blamed continuation of the pandemic for the delay
· The embattled national flag carrier has remained grounded for a year amid a costly business rescue process
· The painstakingly hammered rescue package is designed to protect the interests of the equity partners, pilots, and a plane maintenance schedule as entered in December 2019
The cash strapped South African Airways postponed its resumption of flights again. It announced that all domestic, regional and international flights will not happen until April 30 and October 30 respectively and blamed continuation of the pandemic for the delay. The embattled national flag carrier has remained grounded for a year amid a costly business rescue process. The painstakingly hammered rescue package is designed to protect the interests of the equity partners, pilots, and a plane maintenance schedule as entered in December 2019.
After protracted negotiations and consultations, SAA’s creditors voted in favor of the business rescue plan. According to the plan, the government would have to foot a R10.5 billion bailout bill. There are reports that the grounded aircrafts may be pressed into service for vaccine rollout, while anticipated operations both nationally and internationally will be delayed further.
Since the budgetary support for bailing out the debt ridden airways may not be forthcoming, the rescue practitioners have identified candidates to resuscitate SAA. The names of those investors are likely to be announced soon, according to the government sources. Foremost task before them is to settle payment arrangements with dissatisfied labor union members. More than 3,200 employees have accepted voluntary severance packages. Rescue practitioners are of the view that to commence operations, the airline would need only a lesser number of staff including pilots. Any further cuts in the number of staff would likely attract stiff resistance from the unions.
