Ailing SAA’s business rescue practitioners will need another two months to present their plan to save the national carrier, due to the Covid-19 pandemic. File picture: Rogan Ward/Reuters
Ailing SAA’s business rescue practitioners will need another two months to present their plan to save the national carrier, due to the Covid-19 pandemic. File picture: Rogan Ward/Reuters

SAA business rescue practitioners request extension due to impact of coronavirus

By Loyiso Sidimba Time of article published Mar 22, 2020

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Cape Town - Ailing SAA’s business rescue practitioners will need another two months to present their plan to save the national carrier, due to the Covid-19 pandemic.

Siviwe Dongwana and Les Matuson initially told workers and creditors they hoped to publish their plan by the end of this month.

However, on Friday, they stated: “Given the early stages of Covid-19 and the measures implemented by the Cabinet, the practitioners are of the view that this assessment will not, realistically, be finalised before March 31, 2020.”

President Cyril Ramaphosa declared a National State of Disaster last Sunday following the outbreak of the potentially deadly disease.

Dongwana and Matuson want their completion date extended until May 29, which they hope will allow for sufficient time to determine the full effects of Covid-19 on SAA.

This is the third time the business rescue practitioners have asked for an extension, after being granted extensions in December and last month.

The practitioners still need to have engagements with labour on the looming retrenchments at the airline in terms of section 189 of the Labour Relations Act.

SAA started the facilitating the process of retrenching hundreds of workers on Friday at the Commission for Conciliation, Mediation and Arbitration, and hopes the process will end on May 8.

Last month, the National Union of Metalworkers of SA and the SA Cabin Crew Association lost their Labour Court bid to interdict and restrain SAA from retrenching workers.

Dongwana and Matuson have indicated that the impact of Covid-19 would not only accentuate the need for urgent cost-cutting measures to be considered, such as possible lay-offs and the introduction of short time, but may also adversely impact upon the current section 189 restructuring process, and would be a matter for further consultation with representative trade unions and other representatives.

“It is quite clear that SAA will experience difficulties in completing the plan without having substantially concluded the section 189 process with the consulting parties,” they said.

To finalise their plan, Dongwana and Matuson must also provide a draft to committees and the shareholder, as well as convene meetings to allow foreign creditors to attend.

“At the same time, the ZAR (rand) has weakened significantly against major currencies, with negative effects for SAA. While previously SAA would have benefited from a weakened currency through increased passenger revenue, that benefit is eliminated under the current conditions,” Dongwana and Matuson state in their request.

According to the practitioners, SAA has a number of foreign creditors who will not be able to travel to South Africa due to the measures put in place by the government to fight Covid-19.

The request by Dongwana and Matuson came on the same day SAA announced that it was suspending all international flights with immediate effect until the end of May.

SAA said there was an immediate, drastic reduction of demand for African regional flights as they were not commercially viable and that the suspension of the international flights had resulted in the airline not being able to operate its normal network.

During this period, SAA will not be flying to Accra in Ghana, Lusaka in Zambia, Harare and Victoria Falls, both in Zimbabwe, Windhoek in Namibia, Lagos in Nigeria, Entebbe in Uganda, and Mauritius. However, the struggling airline will continue to render services on its domestic route between Johannesburg and Cape Town.

Political Bureau

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