SA Express expected to ask UIF for help to pay salaries
• State-owned airline in business rescue may be among the first to seek Covid-19 relief after running out of money
SA Express has run out of cash and is expected to be among the first organisations to apply to the UIF temporary employee relief scheme (Ters) for assistance, under the expedited Covid-19 benefit.
The airline did not pay salaries for March. This makes it the first state-owned entity (SOE) to run out of cash.
Many other SOEs have been sailing close to the wind over the past two years, almost reaching this point, but were saved at the last minute by government bailouts or governmentarranged funding.
SA Express suspended operations a week ago and SAA will complete its last flights today before the Covid-19 lockdown starts at midnight on Thursday.
Trade unions National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca) at SA Express said that their members had been told on Wednesday that they would not be paid. SA Express is in business rescue after a creditor brought a successful court application in February.
Unlike SAA, which has been provided with R5.5bn of postcommencement finance by the National Treasury, SA Express has not received any assistance to finance the rescue process. The airline employs almost 700 people.
The business-rescue practitioners and the department of public enterprises, which is the shareholder, could not immediately be reached for comment.
Meanwhile, at SAA, where a cash crunch is also in the offing, employees had a tense wait for salaries. All staff, except some in critical positions, have been told to take annual leave over the lockdown period.
A trade union source said that employees were advised that once their paid leave was exhausted this would become unpaid leave.
SAA was projected to run short of cash early in March. But business-rescue practitioner Siviwe Dongwana said March salaries were paid in full on Thursday.
SAA also hoped to “take advantage of increased demand in the cargo business and any emergency charter opportunities that might present themselves”, Dongwana said. The SAA business-rescue practitioners were this week granted a third extension, to the end of May, to finalise their business plan.
SAA announced on Thursday that acting CEO Zuks Ramasia would be taking early retirement from mid-April.
SAA, which is also in business rescue, has not had a permanent CEO since the resignation of Vuyani Jarana last June.
SA Express suspended operations a week ago. SAA will complete its last flights today before the Covid-19 lockdown starts at midnight on Thursday.
UNLIKE SAA, SA EXPRESS HAS NOT RECEIVED ANY ASSISTANCE TO FINANCE THE RESCUE PROCESS
ALL SAA STAFF, EXCEPT SOME IN CRITICAL POSITIONS, WERE TOLD TO TAKE ANNUAL LEAVE OVER LOCKDOWN PERIOD