Unions back SAA rescue

But political parties and unions agree that the plan should not lead to a jobs bloodbath

PUBLIC Enterprises Deputy Minister Phumulo Masualle has insisted that SAA would have to be saved to protect thousands of jobs.

He said the ailing airline’s labour unions have also backed the process of business rescue announced late on Wednesday.

His remarks come amid concerns raised by political parties and unions that the “rescue” of the national carrier should not lead to a jobs bloodbath.

Some of the parties said the extent of the financial crisis at SAA would be known after business rescue practitioner Les Matuson has taken over the running of the airline.

Masualle said yesterday that they met with the unions and had agreed to the process.

He emphasised that the jobs would need to be saved at SAA.

The DA, IFP and ACDP said business rescue for SAA was the best option available.

But the SACP cautioned that SAA should not be put into business rescue and instead the government should lead the turnaround process.

DA MP Alf Lees said a private equity partner was needed, but he said the business rescue practitioner would be able to unravel the extent of the financial crisis at SAA.

“The financial status of SAA and its subsidiaries is largely unknown given that annual financial statements for the past two financial years have not been published by the SAA board,” said Lees.

He added this made it difficult to know the financial position of other parts of the national carrier.

The IFP and the ACDP indicated that business rescue was the only viable option for government.

The state has for a number of years been giving bailouts to SAA and other SOEs.

It is thought that the bailouts to SOEs have amounted to more than R570 billion and Finance Minister Tito Mboweni had earlier warned that this would come to an end.

Mboweni has said if any SOE gets a bailout, it must be converted into a loan repayable to the state.

Advocate Melanchton Makobe, acting deputy director-general in the Department of Public Enterprises, said the R2bn given to SAA by the National Treasury would help to keep it in business while the business rescue practitioner takes control of matters.

A total of R4bn was needed to get SAA out of its financial woes.

Makobe said the government had put an end to bailouts but the amount would help SAA, which owes various financial institutions billions of rand.