Last chance saloon at SAA for labour and government, say BRPs 

Rescue practitioners give unions more time to accept retrenchment agreement, while state makes final efforts to secure funding.
To sign or not to sign? Some employees say they will, while others are waiting for the outcome of a court challenge set down for May 7. Image: Shutterstock

Public Enterprises Minister Pravin Gordhan has instructed the South African Airways (SAA) business rescue practitioners (BRPs) to extend the deadline for employees to accept retrenchment packages, while the state buys time to get funding or a buyer to enable the process of restructuring of the airline to resume.

The final deadline for employees to accept severance packages is Monday, May 11, with BRPs Les Matuson and Siviwe Dongwana warning that the possibility of any further extensions is unlikely.

New airline

On Saturday the Department of Public Enterprises’s acting director-general, Kgathatso Tlhakudi, said government and labour at SAA had signed a compact to allow a smooth transition to a “new SAA” through sacrifice and collaboration on the new business model. Tlhakudi said the “bigger prize” of the compact would be saving the majority of the jobs in the SAA group and the 60 000 jobs in the industry as a whole.

Tlhakudi explained that government is expecting that the dissolution of the old SAA and the emergence of a new airline will “unfold within the business rescue [window] despite challenges we’ve had to date in the production of the business rescue plan.”

The department has employed the services of an international aviation consulting firm to assist in developing the framework of the new airline and expects this to be concluded in the “next few weeks,” said Tlhakudi. 

Capital 

The department has already indicated that the new airline would be funded through a number of options, including strategic equity partners, funders and the sale of non-core assets. Tlhakudi said “private capital” would be used to realise the business as well as provide managerial expertise. 

In order to give the government room to “properly explore” the funding options – either for immediate guaranteed funding that would allow the BRPs to “reconsider the perspective of a restructured SAA” or the sale of the business or assets to another party – Matuson and Dongwana extended the deadline again. 

Read: SAA: Government and labour agree to work towards new airline

In a letter to unions and non-unionised employee representatives, the BRPs said they would offer labour an opportunity to accept the agreement by 10:00 on Friday, May 8. Should organised labour not accept the agreement the BRPs have reserved their right to extend the agreement to individual employees between May 8 and 11. 

Escape clause

The revised severance package agreement effectively gives employees an additional but conditional week’s pay for every year of service.

This means the final offer is two weeks’ pay for every year spent at SAA, one month’s notice pay, reimbursement for outstanding leave and a pro-rated 13th cheque. 

The BRPs have also added an “escape clause” which makes it clear that no employee will be prejudiced if they sign the agreement on or before May 11 and government subsequently unlocks funding to reinstate SAA’s solvency by June 30.

These employees would be re-employed and their old contracts reinstated. The retrenchment process that was previously underway to cut half the airline’s staff would also continue.

Read: SAA moves to cut almost half its workforce

The agreement further states that the second weeks’ pay will only be payable should the BRPs be able to sell the company’s assets at a value that is sufficient to cover the packages, or if the shareholder, being the state, provides enough money to cover the packages without the sale of any SAA assets.

It also hangs on the express approval by creditors in the business plan that will be published by the BRPs.

Who is taking it? 

On Sunday Matuson and Dongwana said in a letter to workers that they would be opposing a legal bid brought by the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) asking the court to interdict the retrenchment process. 

Read: Unions seek court action over job cuts at SAA

“If successful, it would further contribute to the financial and other challenges that SAA is facing and thereby prejudice all of SAA’s employees’ rights and benefits,” said Matuson and Dongwana. 

The matter will be heard on May 7, a day before the final deadline to accept the offer.

The National Transport Movement (NTM), the Aviation Union of Southern Africa (Ausa), Solidarity and the South African Transport and Allied Workers Union (Satawu) had also requested the extension to May 8.

NTM said it has accepted the agreement in principle, saying it believes that it protects workers. Non-unionised management representatives have also accepted the agreement in principle.

Non-unionised representatives for other employees have rejected the agreement, stating that it “seeks to limit their rights, has no value and no definite date to repay retrenchment packages.”

No money, no pay

The BRPs have said that the airline will not be able to cover salaries beyond April 30. Since May 1, employees have been on unpaid absence even if they have leave days due to them.

Read: SAA’s future: Messages from unions differ

Matuson and Dongwana have warned that not paying salaries will not allow the company to “continue indefinitely” because it still has to pay medical aid, pension and other social benefits. 

For employees who do not accept the agreement through unions or other representatives by May 8, and who also miss the window to sign individually on May 11, the BRPs can terminate their employment for operational reasons.

Further, they will only be entitled to one week’s pay for every year of service as their retrenchment package.

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Let me get this; a “new business plan” but with the same expenses as before plus consulting fees and no capital to start the new airline (begging via private equity etc). This is another flop before it has started; since the only aim is to save jobs when there is no profit being made (difference between a charity and a business is that a business makes a profit… and this is not a burden but an asset).

Why does government think that after 10 years of no profit and continues issues… that a consultant would bring about a change?

But what you don’t know is that the government has a cunning plan to replace the gas-guzzling A340s with flying unicorns…

…or flying magic carpets *lol*

And so today – 5 March – a well-run previously profitable airline, Kulula, is in business rescue. But a horribly mismanaged black hole that has already sucked up billions of rands – SAA – is now going to be ‘successfully resuscitated’??? Can the Communists in the ANC not see that COMMUNISM HAS DESTROYED OVER 30 COUNTRIES AND BEEN KICKED OUT OF ANOTHER 50+ WHERE THEY WERE PARTIALLY IN GOVT – can our brilliant Commies not see and understand the TRUTH? Because trying to resuscitate an utterly moribund airline in these times is a lunacy worthy of Stalin himself. What the hell is Pravin playing at? I once thought he was a good guy. More fool me.

If you chop off a chickens head it still runs around for a while. SAA is like a chicken without a head. Dead but it doesn’t know it!

However, this stupid government can perform miracles … They so skilled … Pravin and his communist team will perform a head transplant … Pravin with reattach that head to that chicken very soon.

My goodness. The government is going to find a private equity partner by May 11 who will sink billions into a failed enterprise that doesn’t, by law, have a single customer.

I reckon they should start by investing their personal pensions into SAA, same goes for the unions. No? Didn’t think so.

Time to stop dreaming

Personal pensions you say? Yes thanks, but we use everyone’s pensions in SA to bail out SOEs, comrade.

This while world aviation is on ICU and some big airlines not going to make it, our ANC government has the skills and wherewithal to launch a new ‘financially viable’ airline.

Go figure.

There is not an investor in the world who risk one cent capital in aviation. Warren Buffet has just sold his investment in aviation.

But then ANC are clever people – they always no better with their so-called experts.

…our airline’s existence is only there to grease the palms of the connected elite. Patronage apparently must continue….

On and On we go.

Stealing from the Poohest of the Pooh.

Les Matuson have pretty much destroyed his reputation. Everybody in his field will always see him as the “guy that could not get the job done”

He folded to the communist Pravin Gordhan.
I hope somebody will challenge this madness of another airline.
I have never heard of anything more absurd.

Correction.

Pravin Gupta.

The new SAA will just be another vehicle to siphon money out of the honey pot by selected appointees off the government. Starting a new enterprise in this economic climate by any organisation is tantamount to financial suicide. But what does the government care? It is only the tax payers money they are risking. As the cart will be pulled by the same donkeys that destroyed the last SAA.

Let me have a guess:

The ” international aviation consulting firm” will be appointed via some politically connected entity who will rake off millions. Then, “private capital” will be from a Motsepe type with cash from the taxpayer; IDC or GEPF; none of his own.

Purely for getting money out

This is so fundamental to all socialists. They invent these grandiose schemes, partly to bribe labour unions to vote for them, mostly out of self-interest, and partly because of vanity, but they never use their own money for these projects.

Take even your average intellectual armchair socialist for instance, the university professor, who wants to bring about “true justice” and “equality”. She does not pay her domestic worker more than the minimum wage, she does not share here salary with her gardener, she does not provide housing, nor does she give financial assistance to poor students. She feels philanthropic, so she motivates the making of laws to force other people to donate their money through taxes. This pseudo-philanthropic academic uses that same legislative process to increase her own salary by extorting money from her old students, who are now wealthier than her. When they speak of justice and equality, they mean it personally, to benefit themselves in other words. These myopic academics with their pathetic self-interests use the legislature to steal from others. That is what socialism is.

What the lowly criminal does by using a crow-bar, the lowly academic does by using the legislature as a crow-bar. They are very false, dangerous and unscrupulous people, these leftists.

Perhaps Gordhan is just talking? Then he can blame the whole mess on the private equity partner that doesn’t exist. But blaming SAA management is not on. Responsibility for failure never lies with management, never.

The time if reconing of the worst of practices – the ANC patronage system of buying votes by just offering people jobs – is up.

It was never sustainable in the first place. Covid-19 just made it more definate after many years of ANCmismanagement and bailouts.

The only way for patronage systems to stop in a nation where voters don’t cognate the corrosive effects of corruption is for entities fail.

The problem is that the SOE entities could individually (like with Eskom) or collectively bring the sovereign down.

Stop throwing good money after bad and do the patriot thing and sever and save SA.

The cadres just can’t accept that those free business class flights for themselves, friends and family have finally come to an end. hence they are trying to hatch a new plan which is equally unworkable.

WTF!

“Gordhan has instructed…………”

Is this Business Rescue SA style????

I’m waiting for a “secret loan” to suddenly and mysteriously appear to pay SAA’s May salaries, otherwise known as a further (taxpayer funded) BAILOUT. Ditto for June, July, etc.
Remember the SAA feeding trough is full of cadres and their families and friends who are elsewhere unemployable.

I am all for a continuation of SAA . New Owner : The unions to 100 %. You ain’t seen nothing yet !

…yup, let new airline to be privately funded by the ANC-party & labour unions’ pension funds.
In that way, they stand to reap all the…err..profits.

This baffles my mind. Government failed to run SAA profitably (the main requirement for a business to succeed). Now they want to start a ‘new’ state owned airline, keep the same number of people (which was mentioned as one of the key problems), possibly give it a slightly different name like ‘New SAA’ and expect it to turn out magic!? Sounds very similar than the old NNP (New National Party).

The downside with this one is that they will pump in tax revenue, which is where I have a problem. No chance to succeed unless it get privatized completely.

…indeed, with governments’ fingers away from the till, please.

NEW AIRLINE in the wings?! Pah!! Forget it! For starters, what about the R26bn debt of current SAA?

Now I see the following in my mind’s eye….

Irresponsible child to father:

“Sorry dad, I crashed your beloved Ferrari 488”

“….can I please now have the keys to your Porsche Cayenne?”

…”dad, I’ve really learned my lesson now” 🙁

And the father tell his mischievous son:

“For sure, go and grab the 1:18 scale MAISTO toy Porsche from my display case. Happy now?”

So for SAA the taxpayer can say: no more big planes for you Mr Politician, you can now start “from the ground up” with a few Beechcraft King Airs & Pilatus PC12’s… Happy?

I’m intrigued – how does a “new airline from the ashes from (bankrupt)SAA” translate into “keeping the aviation sector alive?”
Unpack it for me please, Treasury DG. If THIS is what government believes HOW will Gordhan manage to fix all the other loss-making SOEs!
Wonder if their revived aviation sector will have annual audited Fin Statements….

I thought the definition of stupidity was repeating the same mistakes over and over, and expecting a different result?

Oh…and the last amazing new airline was the ill-fated venture owned by the taxi mafia. That went well

End of comments.

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