SATSA EXPRESSES SUPPORT FOR SOUTH AFRICAN AIRWAYS
(Posted 05th December 2019)
SATSA has noted the decision taken by the South African Airways’ (SAA) Board, supported by Government, to place the national carrier into business rescue.
While the details of “radical restructuring” and the business rescue plan are unclear at this stage, SATSA will continue to engage with industry and monitor the situation at SAA to advise members and their customers about the impact to them.
A statement issued by the Department of Public Enterprises confirmed today that the airline would go into business rescue to “safeguard the good assets of SAA and help to restructure and reposition the entity into one that is stronger, more sustainable and able to grow and attract an equity partner”.
The statement confirms that Government, through the National Treasury, will provide R2bn as post-commencement finance guaranteed by government and repayable out of future budget appropriations for the business rescue process to commence and to enable SAA to continue to operate. Government would provide an additional R2bn, through National Treasury, as post-commencement finance in “a fiscally neutral manner”.
The Minister confirmed that this funding is “not a bailout”, but the “provision of financial assistance in order to facilitate a radical restructure of the airline”.
He said: “This set of actions should provide confidence to customers of SAA to continue to use the airline because there will not be any unplanned stoppages of flights or cancellation of flights without proper notice should that be necessary.”
It is envisaged that the Business rescue process will also incorporate, inter alia, the following:
1. The prevention of a disorderly collapse of the airline, with a negative impact on passengers, suppliers and other partners in the aviation sector in SA
2. The full recovery of capital and interest on existing debt provided to SAA by existing lenders that is the subject of existing government guarantees will not be impacted by business rescue
3. It will provide an opportunity to critically review the cost structure of the airline, while simultaneously attempting to retain as many jobs as possible. This reality was clearly understood in the recent wage negotiation process between the unions and the company
4. This approach also provides a structured opportunity to reorganize the state aviation assets in a way in which they are better positioned to be sustainable and attractive to an investment partner.
To view the full statement, click here.
Yours in tourism,
Hannelie Du Toit