Solidarity brings business rescue application to SAA
JOHANNESBURG - Trade union Solidarity has revived its plans against the South African Airways (SAA) by announcing that it is bringing an application to place the cash-strapped airline into business rescue.
Last year, Solidarity was already planning to bring a business rescue application against SAA, but decided not to proceed with the application after negotiations and an agreement with previous chief executive, Vuyani Jarana.
In a media briefing today, Solidarity said it has served court papers on SAA and the ministers of finance and public enterprises, asking the court to put SAA in business rescue.
This comes as SAA confirmed yesterday that lenders would not advance the airline any further credit without the security and support of a sovereign guarantee.
SAA chairperson of the board implementation committee Martin Kingston said if SAA failed to secure guarantees from the National Treasury, the company would have to be placed into liquidation and be responsibly closed down.
If Solidarity’s application is successful, this would be the first time in South African history that a State enterprise is placed into business rescue.
The union has been vocal about the misuse and squandering of tax money at the airline for some time.
Solidarity chief executive Dirk Hermann said business rescue was essential for the sake of the security of its members at SAA, as well as for the sake of taxpayers.
Hermann emphasised that business rescue was not liquidation, but on the contrary it was an effort to find a solution on the other side of liquidation.
“We are deeply aware of the crisis that SAA is in. The SAA is on its way to liquidation with enormous consequences for employees, the South African economy and the taxpayers,” he said.
“Business rescue means that we can limit the damage for all interest groups, create security and save billions of rands of tax money. The longer we take, the worse the consequences will be.”
SAA’s crippling strike entered the seventh day on Thursday as wage negotiations with the National Union of Metalworkers Union (Numsa) and the SA Cabin Crew Association (Sacca) continued under the auspices of a mediator.
Kingston said the airline needed a proportion of the R2 billion guaranteed debt before the end of the month in order to pay salaries.
Solidarity said a business rescue application was the only remaining option to limit the damage as recent events had accelerated the crisis at SAA.
Connie Mulder, head of the Solidarity Research Institute, said business rescue would give the airline the chance to save those parts of the SAA that are still functional and efficient.
“SAA is hopelessly insolvent. The liabilities of the company exceed the assets by far and the situation deteriorates year after year,” Mulder said.
“According to the 2017 financial statements, there was a loss of R5 569 000 000. This means that R15 257 534 was being lost per day.”
SAA was not immediately available for comment as officials are locked in wage negotiations meeting with the unions.