( 2Minutes read)
· South African President Cyril Ramaphosa had lashed out at
the South African Airways for its decision to cut some domestic
flights which has put the passengers into great difficulty and boring
holes on the rescue efforts of the cash-strapped carrier.
· The public enterprises ministry, which is the nodal ministry
overseeing SAA, said it wanted the route changes reviewed.
· Under South African company law, the business rescue team
can take decisions that are deemed necessary to turnaround a
distressed company independently of the government.
South African President Cyril Ramaphosa had lashed out at the South
African Airways for its decision to cut some domestic flights which
has put the passengers into great difficulty and boring holes on the
rescue efforts of the cash-strapped carrier.
The SAA said it would cease flights to Durban, East London and Port
Elizabeth from Feb. 29, as also cutting some international routes to
conserve cash and make the airline more attractive to potential equity
partners. The government has appointed specialists for rehabilitating
the ailing airlines and to make it attractive to potential bidders the
stake of the cash strapped airlines.
The public enterprises ministry, which is the nodal ministry
overseeing SAA, said it wanted the route changes reviewed. The
ministry officials said that it would be making representations to the
Business Rescue Practitioners to balance the necessity for trimming
unprofitable routes with the need to ensure the future sustainability
of both the airline and South Africa’s aviation industry.
However, President Ramaphosa was blunt in his comments when he said
that the government was not in agreement with what the rescue
practitioners have come up with. According to him SAA is not only a
great symbol for the country but also an economic enabler.
However, there is a legal glitch. Under South African company law,
the business rescue team can take decisions that are deemed necessary
to turnaround a distressed company independently of the government.
It need not go by the dictum of the government at least in theory
