Solidarity against airline merger, wants SAA placed in business rescue

(Duncan Alfreds, Fin24)
(Duncan Alfreds, Fin24)

The proposed merger between SAA, Mango and SA Express could lead to even greater losses, according to Trade Union Solidarity’s head of research, Connie Mulder.

Solidarity issued a statement on Friday indicating its intention to file a court application to have SAA placed in business rescue.

This follows Public Enterprise Minister Pravin Gordhan’s announcement of board changes at SOEs in his portfolio, including SA Express.

The new board includes individuals with a mix of aviation experience, auditing, accountancy, human resources and engineering backgrounds. Gordhan has also decided to appoint an intervention team to support the executive team. The department has seconded its senior officials to the airline, temporarily filling executive positions.

The airline is challenged in raising funding and there are talks with Treasury to provide it with a short-term cash injection, Gordhan said.

Apart from financial challenges, the airline has lost a number of executives, some of whom were suspended for allegations on corruption. The South African Civil Aviation Authority (SACAA) on Thursday grounded SA Express due to non-compliance on 17 specific findings, Traveller24 reported.

Gordhan proposed a merger between the national carriers to create "synergy and savings".

Gordhan also said that selling the airlines was not necessarily the answer to their financial woes.

Solidarity, however, called the idea of a merger "preposterous". "It would be akin to throwing a cement life jacket to a drowning person."

Solidarity wants SAA to be placed in business rescue as the state cannot be trusted with the responsibility of managing the airlines.

"A business practitioner responsible for turning SAA around should be appointed by the court.

"The government as a shareholder should no longer be in control of any airlines – airlines should be run by private companies," Mulder said. Solidarity will file its court application for SAA to be placed in business rescue in the near future, according to the statement.

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