Turbulent SAA says it will pay staff, suppliers

CASH-STRAPPED South African Airways has insisted in Parliament it will be able to pay its staff and suppliers, despite facing a financial crisis.

The SAA’s appearance in Parliament yesterday came as Finance Minister Malusi Gigaba warned the airline it would not get “free money” from the state to stay afloat.

The cash crisis has led to reports it was so broke it would not be able to pay its staff. The airline needs a multibillion-rand rescue package from the state to stay afloat.

The opposition DA warned that Gigaba was considering using pensioners’ money to fund the airline.

Despite the financial crisis, acting chief executive officer Musa Zwane and chief financial officer Phumeza Nhantsi assured MPs that the airline would be able to meet its financial obligations and pay staff salaries.

Zwane said various cost-cutting measures had been put in place to bring financial stability to the airline.

But MPs said the cash crisis has reached a point where there was no money to pay staff at the end of the month.

Alf Lees of the DA said the financial reports they had seen showed the airline would not pay staff salaries and its suppliers.

Nhantsi admitted they did not pay some of their suppliers at the end of July. However, they would ensure they paid staff salaries and would settle outstanding debt with the suppliers if they were given an extension on their loans.

Lees said: “SAA’s corporate plan shows that the Public Investment Corporation (PIC) is one of the identified sources under consideration for funding SAA to the tune of R6bn. This revelation was confirmed by the finance minister in Parliament today.

“Considering that privatisation is off the cards, it means that these funds would have to come in the form of a loan or a bailout. This puts millions of pensioners at the risk of losing their hard-earned money.”

Nhantsi would not say how much their monthly salary bill was. She said they were talking to their lenders to ensure that the money due at the end of September is not recalled.

She said if they extend their loans with the lenders they would be able to pay staff salaries and suppliers.