WINTER GLOOM Airline faces lawsuit
SOLIDARITY: TRADE UNION WANTS SAA FORCED INTO BUSINESS RESCUE
If application succeeds it could have implications for entities such as Prasa.
Trade union Solidarity believes the only way to rescue the financially haemorrhaging South African Airways (SAA) is to have it placed under forced business rescue.
But it expects fierce opposition from government against their historic court application.
If the application succeeds, it would be a first for a state enterprise to be placed under business rescue and could have implications for other ailing state entities such as the Passenger Rail Agency of SA (Prasa) and Eskom.
Solidarity’s chief executive, Dirk Hermann, said court papers in their application would be served next month and Solidarity would in the coming month campaign to obtain mandates from thousands of taxpayers to become part of their lawsuit.
A number of civil organisations have already indicated they want to join the lawsuit as friends of the court, but indications are that government and the SAA would oppose the application because of their view that the airline should remain in government hands.
The head of Solidarity’s research institute, Connie Mulder, said SAA has had nine CEOs in nine years – and almost as many turnaround strategies without any positive results.
“SAA is repeatedly making the same mistakes, while hoping for
is the total loss suffered by SAA in 2017, according to the auditor-general’s report.
favourable results ... The risk that SAA goes into total collapse is increasing by the day.
“The purpose of business rescue is to bring stability and sustainability to the company and the workers ... It’s not just workers’ interests that are at stake, but public interest too,” Hermann said.
The auditor-general said in a report that SAA had suffered a total loss of R5.6 billion in 2017, and expressed concern about SAA’s status as a going concern.
“Based on SAA’s financial statements, we can see that since 2016, its operating loss had increased by 1 000% to R3.7 billion. Disturbingly, SAA recently advised parliament that they would likely lose a further R5 billion in 2018,” Hermann said.
Mulder said SAA’s liabilities exceeded its assets by R17.8 billion and it was totally dependent on government loans, which now totalled more than R30 billion.
If it was a private company, it would have been liquidated years ago, but Solidarity believed it could, because of its unique position, still be saved by putting it under business rescue, involving equity partners in the airline and partially or totally privatising it, Mulder said.
Solidarity has called on government to probe SAA’s mismanagement and said it would also petition political parties for a parliamentary debate about SAA. –