SAA fate still unclear, decision possible by end June - tourism minister

Minister of Tourism Mmamoloko Kubayi-Ngubane says government has reached no final decision yet on the fate of South African Airways, but she is hopeful that a decision may have been made by the end of June.

Kubayi-Ngubane, who is also chairperson of the economic cluster in Parliament, said on Wednesday that "all the avenues" still had to be examined. 

"It is not yet finalised what will happen to SAA. Once we have looked at all the avenues we can decide on a strategy to present to Cabinet for a decision," she said during a briefing hosted by SA Tourism.

"Government continues to interact with unions in this regard after they (unions) raised questions on how the business rescue practitioners of SAA are conducting themselves."

The business rescue practitioners have already indicated that, with government having rejected its last request for funding on 10 April, they will not be able to run the airline longer than the end of the month and might have no other option than to apply to the court to have it liquidated. They have indicated in the past that they would actually prefer a structured winding down.

The more than 4 000 employees at SAA have until 17:00 on Friday to decide whether they want to accept a termination of employment proposal by the BRPS. Gordhan, on the other hand, has reached an agreement in principle with unions on a Leadership Compact to take discussions on the future of the airline forward.

Entire industry impacted

Kubayi-Ngubane noted t that the entire aviation industry has been impacted by the coronavirus (Covid-19) pandemic and SAA was already on the back foot to start with.

"The BRPs are looking for more money from government but against the backdrop of the current environment we asked them to go back and look again at what they can do with resources available," said the minister.

The National Union of Metalworkers of South Africa (Numsa) and the SA Cabin Crew Association (Sacca) are considering taking legal action to try to remove the BRPs.

Numsa and Sacca, which togethere form the largest union representation at the airline, said in a statement on Tuesday evening that they raised with Gordhan the fact that "we are fully committed to ensuring that both SAA and SA Express are restructured, and in this regard, that Government should consider the capitalisation of both institutions if we are to get out of the crisis". For them too the next 48 hours are crucial.

Captain Grant Back, chairperson of the SAA Pilots' Association (SAAPA), indicated last week that they, too, believe the BRPs have not fulfilled their obligation and that SAAPA will  consider court action to have the the BRPs removed.

Another bailout? 

Earlier on Wednesday Mashudu Raphetha, president of the National Transport Movement (NTM), told Fin24 that the union had made a proposal during negotiations with the Minister of Public Enterprises Pravin Gordhan on Tuesday for government - as the shareholder of SAA - to approach Treasury for R3.2 billion in funding set aside for companies which are struggling due to the coronavirus pandemic. Rapetha did not give further details. 

He said the creation of a new airline after some sort of restructuring, which would not include liquidation, is envisaged.

No formal agreement has been signed in this regard but according to him, Gordhan has asked for 48 hours to consider the unions' various proposals, with the deadline being 17:00 on Thursday.

The Department of Public Enterprises said that government is reviewing its options in all airline assets and will inform the public of further developments in due course.

The BRPs responded to Fin24 that "nothing has changed in the business rescue process except for the fact that there has been an extension granted until 1 May at 17:00 for unions to consider their rights".

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