Gordhan hopes some SAA domestic routes get reinstated

The government is hoping that some of the domestic routes cancelled by SAA will be reinstated sooner rather than later, public enterprises minister Pravin Gordhan has said. 

At the time of the announcement by the business rescue practitioners of plans to cancel routes, the government indicated it was against the move, with the department of public enterprises saying it would cause market and customer uncertainty, which may jeopardise the long-term future of the airline.

The reinstatement of the routes has now been proposed to business rescue practitioners Les Matuson and Siviwe Dongwana by the government.

“We want a firmed up route network plan sooner rather than later because that gives everybody certainty that SAA is operating on particular routes,” Gordhan told Business Day on Wednesday. 

“Secondly, we want to do this quickly because we don’t want SAA to lose market share; and thirdly, in the next, short period we hope that the business rescue practitioners will be able to pronounce on [the routes] after having consulted all the necessary parties.” 

SAA’s business rescue practitioners, with whom the decision lies, would not comment on the possible reinstatement of flights.

Last month, the practitioners announced that the airline would cancel all domestic flights, except for a reduced service to Cape Town, as well as some international and regional flights, at the end of February in a bid to further cut costs. 

It was the third time the airline had announced the cancellation of flights since being placed under business rescue, and came after the practitioners told employees that they intend to expedite retrenchments at the airline.

SAA has amassed just more than R18bn in losses since the 2015 financial year and is seeking about R22bn in government bailouts over the next three years.

In 2019, SAA entered business rescue, a form of bankruptcy protection aimed at rehabilitating a financially distressed company, after several years of operational losses and government bailouts that have exposed SA’s fiscal constraints.

The business rescue practitioners were expected to table the rescue plan for SAA at the beginning of this month, but have been granted a further extension of one month by creditors to finalise it. The plan is now expected to be published on March 31.

Deputy president David Mabuza told the National Council of Provinces on Tuesday that the cancellation of the routes was temporary. 

“We will not give up routes ... the business is about routes. Any cancellation of routes is temporary,” Mabuza said, adding that selling off SAA is not on the table. “That is why we have [put in place] business rescue practitioners. That means the business is facing problems and must be rescued. We cannot abandon the business.”

quintalg@businesslive.co.za