The Democratic Alliance (DA) will write to Public Enterprises Minister, Pravin Gordhan, to request disclosure of all deliberations of the consultative process he and the Inter-Ministerial Committee of South African Airways SOC Limited have set up with SAA employee representatives, and that the cost and funding implications of any initiatives be made transparent.
This follows reports of a resolution emerging from a meeting of the Inter-Ministerial Committee and the representatives of the unions and non-unionised employees of SAA to ensure that a new financially viable and competitive airline emerges from the business rescue process (BRP).
As part of their deliberations, the committee reiterated that Government was not in a position to provide any additional funds to the company and that “all parties need to commit to a creative solution for SAA to avoid a scenario where business rescue is deemed to have failed”. Accordingly, the South African Labour Unions were invited to submit proposals on the restructuring of the airline.
The DA would like to remind Minister Gordhan about, and hold him to, his statement that there “must be no dependence on the fiscus”. We will further oppose any and all initiatives that seek to channel, by fiat or stealth, the assets and finances of cash strapped South Africans into yet another exercise in state-owned failure – more so, in these uncertain times, driven by the impact of Covid-19.
The fact of the matter is that SAA is bankrupt and no ‘creative’ solution to resurrect another state-owned airline from the ashes of this state-owned folly is likely to succeed.
The Business Rescue Practitioners must apply to Court in terms of section 141(2)(a)(ii) of the Companies Act 71 of 2008 for the liquidation of SAA, within the time frames contained in the Companies Act.
Part of SAA’s business rescue proceedings includes looking at the airline’s assets to see what can be sold to repay debt. If this process results in new partnerships emerging from the privatisation of the airline and its subsidiaries, and the regulations changed to allow foreign ownership in excess of 25%, a solution may be found.
It must be accepted that this will herald the end of state ownership and that a measure of pain will ensue from Government’s role in mismanagement and tolerance of graft over many years. Government needs to accept and mitigate as best it can this failure of responsibility. It must accept the end of its role as the undertaker of a long and expensive funeral.
The DA welcomes any opportunity that arises out of liquidation to save the brand and rescue necessary jobs, but this will need to be in the absence of the dead hand of the state. New partnerships including key existing stakeholders and new ones will have to be assessed on their merits and contribution to an airline that will operate in a changed and challenged post-Covid environment.