SAA strike

Photo: @flysaa / TW

SAA business rescue: Airline implements new flight timetable

Details following the announcement that South African Airlines will be entering into business rescue made by both SAA and Minister Pravin Gordhan.

SAA strike

Photo: @flysaa / TW

South African Airlines (SAA) has been placed into business rescue. This has been confirmed in a statement by Minister of Public Enterprises Pravin Gordhan and President Cyril Ramaphosa.

This news comes after the SAA Board of Directors and the Executive Committee consultations with the shareholder, the Department of Public Enterprises in an effort to find a solution to the company’s well-documented financial challenges.

Going into business rescue is said to be a considered and unanimous conclusion reached in order to create a better return for the company’s creditors and shareholders, than would result from any other available solution.

SAA business rescue: New provisional timetable will be published shortly

The company is furthermore seeking to minimise the destruction of value across its subsidiaries and provide the best prospects for selected activities within the group to continue operating successfully.

This decision is supported by the government, following a leaked letter from  President Cyril Ramaphosa to Cabinet, which stated that SAA must enter voluntary business rescue.

Gordhan’s statement notes that the airline needs to reduce its reliance on government finances, though they will receive an additional R2-billion to help keep the airline operational.

Gordhan explained, “It must be clear that this is not a bailout … this is the provision of financial assistance in order to facilitate a radical restructure of the airline.”

“This is the optimal mechanism to restore confidence in SAA and to safeguard the good assets of SAA and help to restructure and reposition the entity into one that is stronger, more sustainable and able to grow and attract an equity partner,” said Gordhan. 

The process of business rescue will begin on 5 December, and the appointment of a business rescue practitioner will be chosen will be made shortly to take charge of the company. 

Business rescue aims at rehabilitating a company that is in distress, with a practitioner who is appointed to restructure the business. During this period, the company is protected against legal claims by creditors.

“This set of actions should provide confidence to customers of SAA to continue to use the airline because there will not be any unplanned stoppages of flights or cancellation of flights without proper notice should that be necessary,” said Gordhan.

“Our desire is that the restructured airline will mark the beginning of a new era in South African aviation and must be able to bring in millions of more tourists into SA,” said Gordhan, adding that his department will meet with the business rescue practitioner, all the unions concerned and other stakeholders on an urgent basis.

This news comes after the SAA strike in November by Numsa members and the SA Cabin Crew Association, which the minister says caused immense damage to the reputation, operations and finances of the airline. In addition, travel group Flight Centre South Africa stopped selling SAA tickets due to ongoing concerns. 

SAA said it would endeavour to operate according to a new provisional timetable and will publish the details thereof shortly. Its subsidiary airline, Mango, will continue with services as usual.