A vote on a restructuring plan for loss-making South African Airways (SAA) was delayed until July 14 on Thursday, after some creditors and unions secured an adjournment after months of wrangling over the airline’s future.
The administrators, who took over SAA in December after almost a decade of financial losses, published their restructuring plan last week.
The plan involves scaling back SAA’s fleet while keeping most routes intact. It further needs government to find at least R10 billion of new funds to pay some creditors, fund thousands of layoffs and restart the airline as COVID-19 travel restrictions ease. It is not clear where those funds will come from after Finance Minister Tito Mboweni allocated no new money for SAA in his emergency budget.
“The meeting is adjourned, and we believe it will be adjourned until July 14,” administrator Siviwe Dongwana told a creditor meeting after a 69%-31% vote in favour of the delay.
Unions NUMSA, SACCA and SAAPA argued the adjournment was necessary to correct deficiencies in the plan as well as allow time for further negotiations. Some creditors, including private airline Airlink, which tried this week to block the meeting via the courts, argued the administrators had not complied with the local companies’ law and had not provided creditors with key information.
The administrators said they had responded to the creditors’ concerns. Even if SAA’s creditors approve the plan next month, it could still have to be reworked if the government does not come up with the necessary funding. The Ministry of Public Enterprises has said there are investors interested in partnering with a restructured SAA but has given few details.