SAA rescue plan sits at R 26.7 billion

South African Airways (SAA) Business Rescue Practitioners have released the rescue plan which puts the state’s bill to settle SAA’s current liabilities and funding the restructured airline at R26.7 billion.

The plan was released on Tuesday evening a day late, from the initial June 15 deadline – the BRPs were granted in their fifth extension since December 2019.

The amount includes the R16.4 billion that was allocated in the February budget to pay off government-guaranteed debt and interest over the next three years.

The rescue plan shows that in the initial phase of the restructured airline, which will gradually come into operation from June, there will only be domestic travel as outlined in alert Level 3 and 2 of the lockdown regulations.

The routes that will be retained are Cape Town, Durban and Port Elizabeth, with six aircraft in its fleet until February 2021.

In the beginning, SAA will only retain 1 000 members out of the current 4 622 domestic employees which means 78% of SAA’s domestic employees will be retrenched.

The cost for the workers’ voluntary severance packages is set at R2.2 billion. Their termination of employment will be done through mutual agreement or a section 189 retrenchment process.

Last week, the administrators at SAA asked creditors to delay the publication of a rescue plan for the cash-strapped airline this week, after trade unions objected to the plan being published on Monday.

The rescue plan for SAA, which has not made a profit since 2011, has been repeatedly pushed back amid fierce wrangling over the airline’s future.

In the video below – a discussion on tensions between SAA and the Business Rescue Practitioners:

On Monday SAA staff members arrived at the airline’s headquarters in Kempton Park to picket over unpaid wages.

The staff, who are not being represented by unions, said they had not been paid their May salaries and were desperate for answers from SAA Business Rescue Practitioners.

SAA employees said their benefits have also been tampered with and are going to stage a standstill, demanding their funeral cover, Unemployment Insurance Fund (UIF) and medical aids be paid.

They further said that SAA cancelled employee benefits without consulting them.

The staff say they’re left in the dark.