File image: SA Express. IOL.
File image: SA Express. IOL.

SA Express staff implore state to help fix liquidity

By Siphelele Dludla Time of article published Jul 22, 2020

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JOHANNESBURG - Desperate South African Express employees have pleaded with the government to address the liquidity problems at the state-owned regional airline, just as it managed to rescue sister carrier South African Airways (SAA).

This comes as almost 700 SA Express workers are waiting for the Department of Public Enterprises (DPE) to respond to their requests to be offered retrenchment packages and paid the salaries they are owed.

The DPE, however, said it had provided more than R1.2 billion in urgent financial support to SA Express for the 2019/20 financial year and did not know what the airline had used the funds for.

Michael Hlatshwayo, a member of the leadership team representing SA Express workers, said the funds were released with conditions attached.

Hlatshwayo said the key condition was that the funds be utilised only to repay SA Express’s government-guaranteed debt.

“This was actioned and communicated to the DPE in a letter dated March 13, 2019,” Hlatshwayo said.

“For the department to keep on mentioning that the funds were meant to address the airline's solvency and liquidity problems is factually incorrect, as the funds had to be channelled to specific suppliers only.”

Employees of the provisionally liquidated airline last received their salaries in February, when SA Express was placed in business rescue.

Hlatshwayo said workers felt like they were being punished for the mismanagement of the airline.

He said their plea was to be treated fairly, just like SAA’s employees, and be let go with dignity, which meant paying the salaries they were owed and retrenchment packages.

SA Express workers have expressed concern that they might receive about R32 000 as their total retrenchment package, whereas thousands of SAA workers received more than R350 000 in voluntary severance packages.

Last week, the government agreed to commit to stumping up the additional R10.3bn required to finance SAA’s business rescue plan.

SAA’s approval of the R26.7bn rescue plan saw the national carrier avoiding liquidation after months of protracted business rescue.

In responding to the concerns of SA Express employees, the DPE said it was continuing to seek support from other agencies of government to address the employees’ immediate needs.

The DPE said SA Express’s provisional liquidators were assessing proposals from several potential strategic equity partners, which would determine the airline’s future.

“The government, as the sole shareholder through the DPE, remains sympathetic and deeply mindful of the plight of SA Express employees, who have not received salaries for several months,” the DPE said.

“The request (to assist with retrenchment packages) is still being processed within the government.”

The high court in Pretoria last month ruled that the liquidation of SA Express will be postponed to September 9, following a request by labour unions.

BUSINESS REPORT

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