(5 minutes read)
· The South African Cabin Crew Association (Sacca) and trade union Numsa told that they would go to court to challenge a possible liquidation of South African Airways (SAA)
· The financial losses of SAA Express aggregated to more than R10 billion over the past two years
· The government has been bailing it out every time. The total amount spent on bail out was R 30 billion
The South African Cabin Crew Association (Sacca) and trade union Numsa told that they would go to court to challenge a possible liquidation of South African Airways (SAA). This is in response to the government’s stand that it would no longer provide further funding for the embattled airline.
The government is of the view that SAA/SA Express and Alexkor should be “closed”, which led the trade unions to surmise that Treasury wanted to close the beleaguered airline down, though no such discussion did take place during the briefing to the parliamentary committee. The unions said they are consulting their lawyers how to
prepare a legal challenge in order to ensure that those who are intent on liquidating South African Airways will be stopped in their efforts.
In June last, the stakeholders, mostly the union representatives, voted in favor of postponing a vote on the airline’s business rescue plan to 14 July. This raised the possibility that the flag carrier could eventually be liquidated in what would be an unprecedented end for a state-owned enterprise. SAA went into business rescue in December 2019 following years of losses and repeated state bailouts.
The financial losses of SAA Express aggregated to more than R10 billion over the past two years. The government has been bailing it out every time. The total amount spent on bail out was R 30 billion. The unions also implored President Cyril Ramaphosa to immediately intervene in the matter. Also, they demanded sacking of Finance Minister Tito Mboweni for his “recklessness”, since they feel that his statements compromised the independence and credibility of the imminent vote on SAA’s business rescue plan.
It may be noted that the Department of Public Enterprises, led by minister Pravin Gordhan, has discouraged SAA management, creditors and unions from making any decisions that could lead to the winding down of the national carrier and disposing of its assets. It means that there is a clear division in the government about the rescue plan for the SAA Express.
