Why are we broke and abandoned while govt tries to save SAA, ask SA Express employees

A SA Express jet on Cape Town International Airport's runway.
A SA Express jet on Cape Town International Airport's runway.
Gallo Images/Grant Duncan-Smith
  • SA Express employees were last paid salaries at the end of February this year.
  • A group of employees questions why government is trying its best to save South African Airways, while SA Express and its employees are being "neglected".
  • The DPE has since met with the group and undertook to provide further input on the future of the airline.

A group of employees of state-owned regional airline SA Express, which is currently in provisional liquidation, are pinning their hopes of getting unpaid salaries, as well as fair severance packages, on the Department of Public Enterprises and National Treasury.

This group of employees have nominated The Leadership Team to represent them, and have been picketing on and off at the Union Buildings and the offices of the Department of Public Enterprises in Pretoria since just after the coronavirus lockdown started at the end of March.

State-owned SA Express has almost 691 employees. The regional airline was placed in provisional liquidation on 29 April 2020 after its joint business rescue practitioners filed an urgent court application in this regard in the South Gauteng High Court.

This followed a failed business rescue attempt brought by a service provider in March. The state has provided more than R1.2 billion in urgent financial support to SA Express for the 2019/20 financial year, including R300 million released last October.

The court date was set for June 9 for any party to come and show why the airline should not be placed in final liquidation. However, due to the possibility of a potential investor, the matter has been postponed until 9 September.

Auctioneers have already advertised the intended auction of SA Express' Bombardier jets, engines, other equipment as well as licenses and other infrastructure "required to operate an airline in Southern Africa".

The Leadership Team has handed over a memorandum setting out their grievances to an official at the Presidency as well as to the acting director general of the DPE Kgathatso Tlhakudi.

The memorandum argues that the predicament of SA Express comes from "neglect and mismanagement and because the DPE [was] not looking after it in providing qualified, competent and honest board members and senior management".

SA Express employees were last paid salaries at the end of February this year. Since then they have only received two Covid-19 TERS payments. Furthermore, they had to discover that the third party contributions which were deducted from their salaries for January, February and March were not paid over to relevant parties like medical aid, their life policies, UIF and SARS.

Government focus on SAA

The group questions why government is trying its best to save South African Airways, while SA Express and its employees are being "neglected". They felt that employees at SA Express should also be considered for any new airline that might arise from SAA, since both are state-owned airlines.

According to Michael Hlatshwayo, a number of both unionised and non-unionised employees, became disillusioned with what they regarded as a lack of action on the part of unions represented at the airline. He claims the group has support from across the country.

"We believe we should be treated like SAA. If SAA is in a situation where they are going under, yet employees are offered retrenchment packages, we believe we must be offered the same. We also believe that if there is an opportunity to save SA Express, we should be given the chance to take part in the process," says Hlatshwayo.

The DPE has since met with the group and undertook to provide further input on the future of the airline.

Past corruption

On behalf of the DPE, Tlhakudi responded to Fin24 that, because SA Express has been placed under provisional liquidation, its future would be determined by the courts. He added that the DPE is engaging the Unemployment Insurance Fund (UIF) to assist with a motivation for the immediate payment of outstanding salaries.

At the same time, the provisional liquidators are assessing proposals from several potential strategic equity partners for the airline.

"In charting the way forward, the DPE believes the key to solving the difficulties facing SA Express is…finding credible strategic equity partners who can introduce the required technical, financial, and operational expertise into the business," says Tlhakudi.

The dire financial situation of the airline was then exacerbated by the negative impact of the Covid-19 pandemic which has immensely affected airlines globally.

Tlhakudi recently told Fin24 that at SA Express one is dealing with an airline that has failed due to corruption.

"There was serious stealing at SA Express and we hope the culprits will be prosecuted," said Tlhakudi.

Unions respond

The National Transport Union (NTM) says it fully supports the group of employees continuing to fight for their rights. It says past pleas to the Presidency did not lead to anything.

"These employees are not the reason for the demise of SA Express, but unabated looting over the past 10 years," says Mashudu Raphetha.

The National Union of Metalworkers of South Africa (Numsa) says it is not entirely true of the group of employees to claim inaction of unions.

"The provisional liquidation was postponed because we - Numsa and Sacca - went to court to request that the DPE be given time to engage with a possible investor. Also, we intervened for monies to be paid to employees as part of TERS," commented Numsa.

In the view of Numsa, there is no "agenda" from the DPE or government to try and save SA Express and its workers have been "abandoned". As far as it knows, Numsa members are not part of The Leadership Team group of employees.

Numsa says it holds meetings with its shop stewards weekly to discuss challenges and also liaises with the former rescue practitioners and the liquidators.

"We have done everything in our power to get the DPE to take a position on SA Express and this has been communicated to our members. Some maybe thought we were not pushing as hard as we could, but they can now see first hand our frustrations that DPE simply won't take a stand, comments SACCA president Zazi Nsibanyoni-Mugambi.

"SACCA continues to engage with our members at SA Express in the search for an end to this distressing situation. SACCA and NUMSA have gone as far of looking for a strategic equity partner to take over SA Express. They have submitted an expression of interest to the liquidators and we call on the liquidators to take the route of saving jobs instead of selling the airline off part by part."

* This article was update to include comment from SACCA.

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