Meeting of creditors to decide the fate of embattled national carrier
THE GOVERNMENT yesterday made its final push to get SA Airways’ creditors to vote in favour of the proposed business rescue plan to avoid the liquidation of the airline.
The Department of Public Enterprises (DPE) described the plan as the only realistic pathway to restructure the airline and for a new national carrier to emerge from the business rescue process.
The DPE said approving the plan would make the creditors and employees become the co-creators of a new national airline.
“This is the only realistic path through which creditors and employees will derive optimum benefit, either for outstanding debts due or for severance packages that will become available to retrenched employees,” the department said.
“It is also the preferred path from which a new viable, sustainable, competitive airline that provides integrated domestic, regional and international flight services can emerge.”
SAA business rescue practitioners Les Matuson and Siviwe Dongwana have scheduled a creditors’ meeting today that will decide the fate of the troubled national carrier.
A 75 percent vote is required to approve the R2.27 billion rescue plan, but if creditors vote against it, SAA would face liquidation.
Labour unions and staff representatives, with the exception of the SAA Pilots Association (Saapa), have accepted voluntary severance packages (VSPs) for SAA employees.
Saapa wants SAA to retain 3 099 employees as opposed to the planned 2 000 that would be kept for the start-up of the new airline.
The association also wanted an improved VSP to incentivise senior pilots, while SAA was offering more than R1.9 million.
The DPE yesterday rejected all Saapa’s demands, describing them as unreasonable, unaffordable and more financially rewarding for the pilots than any other class of employees.
It said Cabinet had expressed its support for the concerted effort to mobilise funding from various sources to finance the plan, including from potential equity partners for the uptake of the new airline.
The SAA rescue plan would see workers paid one week per year of completed service, one month’s notice pay, accumulated leave paid out, a 13th cheque and a top-up of severance packages calculated on a backdated 5.9 percent wage increase.
“Any further delays of the creditors vote or a vote to reject the business rescue plan, will put severance benefits for employees, the retention of 1 000 jobs and settling outstanding debts with creditors at risk,” the DPE said.
“It will also increase uncertainty for creditors, SAA employees and potential investors.”
If SAA were liquidated, every employee, no matter the numbers of years spent at the airline, would receive only a capped severance settlement of R32 000 and lose all other benefits.