DA says SAA must be liquidated after business rescue practitioners plead for new extension

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The DA has urged the business rescue practitioners of SAA to apply to a court to liquidate the airline, saying the business rescue process has turned into a "farce". 

This comes after the BRPs on Friday wrote to the struggling state-owned airline's creditors to request a third extension to the deadline to publish their business rescue plan. The latest request for a postponement, included a letter sent to creditors on Friday, argues that the impact of the coronavirus on the global airline industry warrants a new two-month extension.

"Simply put, Covid-19 is an uncontrollable event that creates an environment that limits the practitioners’ ability to produce any credible plan, " wrote joint business rescue practitioners Siviwe Dongwana and Les Matuson on Friday. The letter was sent to the cash-strapped airline's creditors on the same day that SAA announced the suspension of international and regional flights.

The DA, meanwhile, on Sunday said it had written to Matuson and Dongwana to urge them to immediately apply to a court to liquidate SAA.

"The complete lack of any urgency on the part of Matuson and Dongwana to get the business rescue plan approved is a clear indication that the entire business rescue process is a farce and has been so from the very beginning.

"Given the collapse of ticket sales income as a result of the Covid-19 pandemic, on top of the dire financial position of the airline, it would be immoral for the SAA creditors to grant the SAA Business Rescue Practitioners yet another extension to submit their proposed SAA business rescue plan," sates DA MP Alf Lees. 

SAA was placed under business rescue in December. In February it announced the cancellation of all its domestic routes apart from the popular Cape Town - Johannesburg flight in an effort to save costs.

Request for extension 

The practitioners say in their new letter to creditors that before they can publish their business rescue plan they will need to assess the impact of the coronavirus - and the measures introduced to stop its spread - on the state-owned airline.

They believe this cannot "realistically be finalised" before March 31 and have asked for a new extension to May 29.

In addition, they state that SAA has a number of foreign creditors who will not be able to travel to South Africa due to travel restrictions.

"To date, Covid-19 has had a detrimental effect on the airline industry globally, resulting in flight cancellations, grounding of aircraft, closure of airports as well as retrenchments of employees," state the BRPs in their letter.

"This detrimental effect has already impacted SAA’s business, with forward bookings collapsing substantially on international and regional routes in the week ending March 13, 2020 compared to the same week in the previous year."

The practitioners say that the implications of the collapse in customer demand, coupled with "necessary" travel restrictions previously announced by President Cyril Ramaphosa's  have resulted in a "bleak revenue outlook".

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