South African Airways seems to have reached the end of the line. Despite clinging on to life for the past few months, the airline is now just days away from either being wound down slowly or liquidated quickly, depending on the actions of its 4,700 employees. This would make way for a new national carrier, one which it is hoped will provide jobs for the many who are set to lose out with the closure of SAA.
End of the runway for SAA
South African Airways, almost a century old, seems to have reached the end of the runway. Discussions that took place yesterday between the Public Enterprises Department, SAA’s rescue practitioners, and workers unions suggest that the airline is on the verge of being liquidated.
Business Rescue Practitioners (BRPs) Les Matuson and Siviwe Dongwana had previously planned to liquidate the airline and had issued a deadline of the 24th April for workers to choose between terminating their contracts or liquidating the airline. However, they put this on hold until May 1st.
Now, it seems that a deal has been reached which will see SAA closed down and liquidated, and a new airline formed in its place.
Apparently a deal has been reached in which South African Airways(SAA) will be completely shut down and a new airline will be formed. pic.twitter.com/9dQyPlW3Kn
— AfricaAviationNews (@AfricaAirlines) April 29, 2020
The National Transport Movement (NTM) has alleged that the decision has been made to form a new airline during a meeting between unions and the Public Enterprises Minister Pravin Gordhan. In a statement to EWN, NTM president Mashudu Raphetha said,
“It is with great regard that after having had the meeting with the minister, the new airline will be born out of SAA. We have tried our level best to ensure that the airline still flies [and] we need to participate in the formation of the airline in order to keep most jobs.”
BREAKING NEWS: The National Transport Movement says a decision to shut down SAA and form a new airline has been reached. The union says the plan was confirmed yesterday during a meeting between SAA unions and Public Enterprises Minister, Pravin Gordhan #SABCNEWS pic.twitter.com/Wznq13m5a0
— SAfm news (@SAfmnews) April 29, 2020
According to Raphetha, discussions about a new airline are already at an advanced stage and further details will be released soon.
Confusion at the unions
Although the message from NTM is abundantly clear, the same message doesn’t seem to have filtered through to the unions. The National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crews Associations (Sacca), who jointly represent the bulk of the airline’s 4,700 employees, seem convinced that the government will swoop in with an eleventh-hour rescue package.
The two unions last night released a joint statement urging members not to sign the retrenchment agreements proposed by the BRPs. They accuse Matuson and Dongwana of spreading “misinformation and emotional propaganda,” saying that workers are facing “undue pressure” to sign the agreements. In the statement, the unions complain about,
“…the undue pressure these persons are placing on employees during this period of uncertainty and anxiety to sign hollow and conditional retrenchment agreements, tantamount to workers being forced to essentially relinquish their rights.”
The unions say that the next 48 hours are critical in their mission to save SAA. Indeed, workers have been given until Friday, May 1st to sign the agreements. All of the 4,700 employees need to sign the agreement to terminate their contracts; if they do not, the BRPs will be forced to undertake immediate liquidation procedures.
With the termination contracts unsigned, SAA workers will forgo any severance pay. To claim their wages and any other pay they are owed, these people will be forced to join the queue behind other creditors of the airline. NTM has strongly recommended workers sign the agreement by Friday.
What do you think about the situation at SAA? Is it time for the workers to back down and sign the retrenchment plan? Let us know in the comments.