SAA: The End is Nigh

2015-11-27 07:17

Dudu Myeni’s fall from grace may not receive as sharp a criticism as the one responsible for putting here there. In the past few days, the unravelling of the once beloved national carrier - perhaps at one time one of the most well run in the world – has led to new a spate of flagrant facebook commentary and dystopian resignation. South African Airways is now effectively cash strapped, making way for yet another suspense-filled, last minute rescue mission, a la Eskom. The memo report confirms that SAA is technically bankrupt because it cannot meet its payment obligations to Airbus. This inability to meet its obligations is a material event that triggers a duty on the directors to notify creditors or to apply for business rescue. Failure to do so amounts to reckless trading and is a crime. The inability of SAA to meet its obligations also triggers the provisions of multi-billion rand loan agreements with creditors including Airbus entitling them to invoke default and penalty clauses.

Now that we’ve had 100 days of uninterrupted electricity supply, cabinet finds it convenient to boast in its appointing of [sound] board members, subsequently expected to appoint executives who [actually] do their jobs. Besides the obvious redundancy here, the wait by government for things to fall apart mirrors childlike behaviour while playing playing video games. The scope for starting over grows slimmer by the day, as dubious appointments to State Owned Enterprises (SOE’s) erodes what little hope is left of facilitating growth and inspiring business and investor confidence in the country. Recently released statements from government about the appointment of a new board inspires little to no confidence, other than the almost certain fact that with this new board comes another bailout. Once again this will be at the expense of taxpayers and an increasingly disgruntled public.

In the banned document SAA is so desperately trying to conceal, several reneged agreements, with huge financial implications I might add, relate so easily to ineffectual childlike decision making. Legal counsels for the SOE have already affirmed the precarious position in which the airline now sits – advising that the merits to continue in such a state aren’t only detrimental for the company but essentially illegal. In my modest opinion SAA is toast. The show is over. Directors are probably scrambling to save their hides as the unique combination of ignorance, stupidity and sheer hubris constituting Myeni's behaviour shows no signs of reaching a merciful end. If she refuses to apply for business rescue and make disclosure the aircraft carrier is essentially done away with. As we speak Airbus lawyers and big bank lawyers are moving to safeguard their clients' interests as it all comes tumbling down. If this is the apex of Cadre deployment, then it would surely befit a resounding climax as the thrill ride thus far has taken many sensible South Africans for a trip they would largely want to forget, if we make to the end of course.

Source: https://en.wikipedia.org/wiki/South_African_Airways

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