DPE welcomes publication of revised SAA business rescue plan, urges creditors to vote in favour
The Department of Public Enterprises (DPE) welcomes the publication of a revised Business Rescue Plan for SAA and urges creditors, employees and stakeholders to vote in favour of the plan next Tuesday.
As the shareholder on behalf of government, the DPE believes the plan is the most expeditious option for the national carrier to restructure its affairs, its business, debts and other liabilities, resulting in the emergence of a new viable, sustainable and competitive airline that provides integrated domestic, regional and international flight services.
The Business Rescue Practitioners (BRPs) have scheduled a creditors meeting for Tuesday, 14 July 2020 to vote on the business rescue plan. A vote in favour of the business rescue plan by 75% of the voting interests would be required to carry the vote.
In supporting the plan, government is committed to mobilising the necessary resources to fund the transition. This includes the severance packages, which meet the minimum requirements of the Labour Relations Act, and the incentivisation of those employees at the lower rung of the remuneration scale to ensure that they are compensated with minimum benefits.
The DPE appreciates the support of all SAA’s stakeholders who recognise that a new, restructured, competitive airline, born out of the old, is the best option to immediately take back to the skies. We need to preserve the brand of the national carrier, reclaim SAA’s market share while fighting to compete more in the emerging market space – notwithstanding the impact of the Covid-19 that will constrain the aviation industry for some time into the future
The DPE welcomes this endorsement of the voluntary severance packages by the National Transport Movement (NTM), the South African Transport and Allied Workers Union (SATAWU), the Aviation Union of Southern Africa (AUSA), Solidarity, the National Union of Metalworkers of South Africa (NUMSA), the South African Airways Cabin Crew Association (SACCA) and representatives of SAA non-unionised managers and ground staff.
The SAA shareholder appreciates the level of commitment and cooperation from these unions and staff representatives to accept fair and reasonable severance packages in the interest of their members, at a time when the devastating consequences of the COVID-19 pandemic are causing thousands of job losses in the global aviation industry.
The DPE is concerned with the position of the SAA Pilots Association (SAAPA), which has not accepted the VSPs. It is a concern that SAAPA has embarked on a parallel process through which they want to consult the BRPs to extract unaffordable concessions for the purpose of attaining more benefits for their members at the expense of the old and the new airline that is being envisioned.
SAAPA is seeking benefits for its members, which are far more lucrative and financially rewarding for pilots than any other class of employees at SAA. SAAPA put forward a case that their proposals will bring cost-savings of R290 million to what is being proposed in the current business rescue plan.
The DPE believes the costs that a new airline will be burdened with in terms of SAAPA’s proposals, by far exceeds this purported saving and will lead to the very distinct possibility that a new airline will not be financially viable. Accordingly, the DPE has informed SAAPA that their proposals cannot be accepted and SAAPA was urged to join other labour unions in accepting the VSPs.
The DPE is not in a position to accede to any further unreasonable and greedy demands from sections of union leadership for additional benefits.
The DPE supports the plan that allows for a conservative start of a new airline so that it can recapture the market, revamp the board and management and fill executive positions with qualified and fit-for-purpose leadership. This will also help prepare for the launch of the long-term operational strategy, as well as build a company that will reabsorb a significant amount of qualifying people during the interim flying period.
Projected costs were taken into consideration when determining the size of the new airline in order to allow for a proper take-off towards competitiveness. We, therefore, hope and believe that creditors will be able to appreciate the work is done and the sacrifices that both the employees and the shareholder were prepared to endure to bring back the competitive national carrier.
For media enquiries:
Sam Mkokeli
0820842051
