Picture: BUSINESS DAY
Picture: BUSINESS DAY

The government is not happy with the decision by SAA’s business rescue practitioners to cancel some local and regional flights, and may attempt to force their hand on the matter.

Reacting to the cancellation of many domestic as well as some regional and international routes, the department of public enterprises said on Friday it will be making representations to the business rescue practitioners in order to “balance the necessity for trimming unprofitable routes with the need to ensure the future sustainability of both the airline and SA’s aviation industry”.

The department believes the move to cancel the routes will cause market and customer uncertainty that may jeopardise the long-term future of the airline, it said. “This will necessitate a review of the business rescue practitioners’ recent announcement. Our submission will include a proposal that the route network changes announced by the business rescue practitioners be reviewed to ensure the sustainability of the airline.” 

“Whilst understanding the impact of the business rescue process on the restructuring of routes, staffing and costs, the government and business rescue practitioners are both committed to a viable SAA as an outcome of this process,” it said.

"The SA government had already communicated to the business rescue practitioners that the rescue plan to be developed by the business rescue practitioners should result in a restructured SAA, a national carrier which is sustainable and viable in the future,” said the statement.

The department’s statement was released a few hours after President Cyril Ramaphosa made similar comments before jetting off to Addis Ababa, Ethiopia for the AU summit. Ramaphosa said that he does not agree with the decision to cancel several local and international SAA routes from the end of the month.

“We are not in agreement with what the business rescue practitioners have come up with ... that those domestic flights should be cancelled,” said Ramaphosa. “We want to find out what the rationale is. We want to have a discussion with them because SAA is not only a great symbol for the country but also an economic enabler.”

This is the third time the airline has announced the cancellation of flights since being placed in business rescue and comes after the practitioners told the airline’s employees that they intended to expedite retrenchments.

SAA went into business rescue in December after several years of heavy losses that necessitated perpetual bailouts from the state. It recently received a R3.5bn loan from the Development Bank of Southern Africa, which enabled it to continue flying while the business rescue practitioners prepare to restructure the company into what is hoped to be a sustainable business.

The business rescue practitioners’ spokesperson Louise Brugman declined to comment on the statement.