Public enterprises insists that SAA is not going to retrench workers
The department says it is still in discussion with unions about a new business model for the airline
The department of public enterprises has insisted that SAA isn't about to embark on a wholesale retrenchment of its employees and said it was still in discussion with unions about a new business model for the airline.
The Business Rescue Practitioners, appointed to come up with a restructuring plan for the company, are still consulting with creditors, unions and the government as the shareholder, the department said in a statement on Saturday.
SAA was dealt what most observers believed to be a final blow when the coronavirus outbreak floored aviation globally. Even before then, government was struggling to justify pouring more money into an unviable business that has received R16.5bn over the past decade and lost about R28bn.
It was put into business rescue four months ago, a process that hands over management to practitioners who have a mandate to facilitate its rehabilitation.
“Government is committed to a dynamic and viable aviation sector that will serve as a contributor to a number of sectors of the economy, including tourism, and also serve other commercial needs of the country,” the department said.
In a proposal sent to unions and seen by Business Day, SAA's practitioners, Les Matuson and Siviwe Dongwana, laid out a process that set out a plan for firing all its workers, bringing up the possibility that they might not even get severance packages, depending on the success of the airline's plan to sell assets.
Earlier this week, the government told the SAA practitioners that it was unable to provide the airline with further funding, and also refused a request for it to raise funding in foreign capital markets.
Public enterprise minister Pravin Gordhan is due to give a presentation to cabinet on SAA at a meeting on Monday.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.