Picture: THE TIMES
Picture: THE TIMES

Trade union Solidarity lodged court papers on Thursday requesting that SAA be placed in business rescue.

The Companies Act allows trade unions, or any interested party such as a creditor, to bring such an application. Business rescue aims to facilitate the rehabilitation of a company that is financially distressed by providing for the temporary supervision of the company and management of its affairs, by a business rescue practitioner.

The court will need to make a ruling on whether SAA is a candidate for business rescue or whether it should be liquidated. The company has not tabled its audited financial statements to parliament for two years because it is not a going concern.

The union said it is acting on behalf of its members within the SAA group, but also on behalf of its members in public enterprises in all sectors in the SA economy and on behalf of every South African who pays tax.

“The crisis in SAA not only threatens the jobs of SAA employees, it threatens all workers and taxpayers. Solidarity’s members are also ordinary workers who pay a portion of their hard-earned money as taxes. We also act on behalf of the approximately 500,000 members of the Solidarity Movement who faithfully pay their taxes,” Solidarity’s COO Dirk Hermann said.

“They cannot allow their tax money to be constantly misused to subsidise struggling, ineffective state-owned enterprises (SOEs).” 

Solidarity had previously planned to bring such an application but was encouraged by former CEO Vuyani Jarana and the department of public enterprises not to do so.

“We are profoundly aware of the crisis SAA finds itself in. SAA is heading for liquidation, which will have huge consequences for employees, the SA economy and for taxpayers. In all, 11,000 workers will lose their jobs and a debt burden of billions of rand will have to be absorbed by the Treasury if there is no radical intervention,” Hermann said.

“A business rescue application is the only remaining option to limit the damage. Recent events at SAA accelerated the crisis. SAA’s day zero is imminent. The current shareholder has lost control over finding a solution for SAA.” 


To be a candidate for business rescue, SAA must either have an ability to trade its way out of financial distress or there must be a compelling argument that it will receive more for the sale of its assets through business rescue rather than liquidation.

Non-executive director Martin Kingston told parliament’s standing committee on public accounts last week that the board had considered and rejected the business rescue option because SAA has no visible prospects of obtaining the working capital it needs to continue operating. 

The ministry of public enterprises said it has received the papers and its lawyers are looking into the matter. 

SAA, which is unable to generate enough revenue to cover costs, is in the grip of a strike by the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Saca), which it has warned will further exacerbate its financial position.

Public enterprises minister Pravin Gordhan told unions on Tuesday that the government could not give the airline any more bailouts.



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