SAA spent R9.9bn since filing for bankruptcy protection

Business rescue practitioners report to Parliament.
Image: Shutterstock

South African Airways (SAA) has spent just under R10 billion since it entered a form of bankruptcy protection, business rescue practitioners said on Friday as they flagged a structured wind-down process as their preferred option for the carrier.

The troubled state-owned airline, which has not made a profit since 2011 has been burning cash and is dependent on government bailouts to remain solvent. It entered business rescue in December in a last-ditch bid to save the company.

“In terms of the amount of money that has been utilised… by the airline from December 5 to the end of April we indicate that the total spend was R9.9 billion,” Siviwe Dongwana, joint business rescue practitioner appointed to turn around SAA, told lawmakers on Friday.

A fifth of the money was spent on aviation fuel and 16% went on salaries and allowances, he said, referring to some of the major expenses incurred during this time.

Administrators at SAA said in the absence of extra funding the best way forward might be to run a structured wind-down of the business rather than liquidation, which opposition parties have called for.

“There is no question of doubt in my mind that a liquidation process would materially erode value and the net recovery for creditors could be an absolute disaster,” said Les Matuson, joint business rescue practitioner at SAA, when answering questions from lawmakers.

Early this month South Africa’s Labour Court ordered a halt to layoffs at the ailing airline, siding with two trade unions who had argued that the airline’s administrators had acted unfairly.

On Wednesday, the administrators, who have no previous aviation experience and are under pressure to produce a restructuring plan after being in the job for five months, said they would not sell assets for an interim period without involving the government.

SAA has received bailouts worth more than R20 billion over the past three years.

It is running low on cash after the coronavirus pandemic forced it to halt all commercial passenger flights and the government told the administrators it would not provide further funding.

COMMENTS   14

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

Perhaps just ask the banks where the moneys going ?

This is a real zombie. It causes mayhem and desteuction, even long after its demise.

More dithering. SAA refuses to die. Going to be billions more to put it to rest.

By which time the reserve Bank will probably be well into money printing

Now Pravin is castigating the BRM’s – I wonder who appointed them and whether they sat with government to determine scope of work, levels of responsibility, feedback cycles.
Seems government is playing fast and furious and don’t want a solution.
I do believe the incompetency lies within government and especially since this virus hit town they don’t seem to have a disaster recovery plan at all and seem to gazette whatever comes into their head

Why blame Pravin, its in the nature of every business rescue practioner and liquidator to loot money like our politicians. Where have you ever seen a business comes out successful after a BRP was involved. They are the vultures that finally finishes up what ever is left of the carcasses, in some cases loading it with further debt.
I have witnessed a number of companies who could have made very easily back on their feet but than after BRP, it just fails. Their rates are so high, which adds to the existing overheads of the company that there is no way that it will ever survive.

Time to tell Pravin that communism does not work, where has he been the last 30 years! Catch a wake up, we are all going to go down soon! 80% of your population does not fly, or at least can’t afford it! Face it you are a failure!

SAA is the only recurring nightmare that I just don’t seem to be able to wake up from….but I find that when I dream I am waking up, I can get on my computer and dis-invest from everything that can be tainted by this never ending problem…lets not forget how investors were hit in 2008 because millions of bad mortgages were slipped into all sorts of so-called investment grade instruments to make other people pay for the losses.
Who are they going to try to make pay for the continuation of this failure now, if Government say their isn’t any tax money available for it?

The business rescue practitioners spent the whole R9.5 billion simply to get Pravin Gordhan off their backs and get him to shut the hell up.

So 36% went to fuel and wages. And the rest? I would have thought that the incurring of further debt and paying out of funds for any thing would require individual sign offs. This does not make any sense at all. Is there no professionals employed by the state any more?

The model of governance that the ANC has forced upon South Africa is a never ending exercise in rule by myopic and collusive greed and deception. It is historic in its enormity of negative consequence and willful blindness. It sets the free world’s benchmark for the abject failure of the first order in every department. This a place that is long since established as encouraging, fostering and mainly attracting the worst types of operators.
SAA is the billboard for all that is negative about the ANC governance of South Africa because there are virtually no sustainable positives in such an inevitably bleak future that must now ensue.
This governance has been and will clearly always remain a being without adequate honesty or competence in a land where merit is often given to the negative and rarely to that which is potentially positive.
You can only reap that which has been sown. When the roots are rotten the crop is a failure.

Was it not Pravin Gupta that gave them money he shouldn’t have to start with?

Why did he ENSURE they had money? Was it not to spend?

TSK!!!!!!!!!

Based on the figures given above, the average salary for the 5,000 SAA employees is R63,500 PER MONTH. No wonder the unions are doing all in their power to halt the liquidation process. No wonder family and friends do not wish to see the demise of this “honey pot”.

This type of spending is not rescue but plunder. Part if corruption.

There should nationwide protests if just 1 cent of taxpayer money is spent on the ‘new’ airline.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: