Will South African Airways be saved or not?

Will South African Airways be saved or not?

Current feedback from labour parties who have been in talks with the government only serve to confuse the already murky situation. 

The National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crews Associations (Sacca) believe that government will swoop in to save the airline. The two unions have advised their members to not sign a severance package agreement provided by SAA’s business rescue practitioners. 

Meanwhile, the National Transport Movement (NTM) has urged workers to sign the agreement before the Friday deadline saying the airline had reached the end of the road. 

All three unions separately met with the Department of Public Enterprise’s Minister Pravin Gordhan on Tuesday and were providing feedback to members based on those discussions. 

Don’t sign

In a joint statement released late on Tuesday evening, Numsa and Sacca said they had a constructive engagement with Gordhan about ensuring the airline’s “continued existence”. 

The two members told members that the next two days would be critical to secure this and urged employees to not “succumb to misinformation and emotional propaganda” from BRPS Les Matuson and Siviwe Dongwana and the head of employee relations Lourens Erasmus. 

Numsa and Sacca said the three men had been placing “undue pressure” on employees to sign “hollow and conditional retrenchment agreements, tantamount to workers being forced to essentially relinquish their rights”.

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

“This takes place in circumstances where there is an unequivocal commitment from government to do everything reasonably possible to save SAA in the interests of workers and the country as a whole,” said the unions. 

48-hours

Workers have been given until May 1 to sign the agreement. The BRPs have said that without funding from the government a structured winding down of the airline is the only alternative to avoid the immediate liquidation. This would ensure better returns for workers and creditors through the managed sale of assets. 

In order to do this, all of SAA’s 4 700 employees will have to accept the termination of their employment contracts failing which the BRPs would have to convert the rescue proceedings into a liquidation. If SAA goes under liquidation without a severance agreement between workers and the business their claims would rank far below those of creditors. 

Numsa and Sacca say that they’ve informed the minister that the government must capitalise the airline instead. 

“During the next 48 hours, various further engagements will continue between labour and government on a technical and legal basis to find an appropriate solution which will be capable of constituting a constructive input towards the finalisation of a business rescue plan capable of adoption by all stakeholders,” said the unions. 

Take the offer 

However, NTM, which has, in the past, been optimistic about the future of the airline and is the only union to publicly issue alternatives to wholesale retrenchments even without government funding, made a turnaround on Tuesday. 

NTM informed members that following its meeting with Gordhan, it was clear that SAA would close and told members that they should conclude with signing their severance packages on April 30. 

In a notice signed by NTM President Mashudu Raphetha, he said Gordhan had confirmed that a “new airline will emerge from the shell of our soon to be former airline”. 

Discussions around the new airline are apparently at an advanced stage in government and will be released in due course according to Raphetha.

He added that the government had also prioritised finding a strategic equity partner to “solidify the business model intended a new airline”.

Raphetha said the union would safeguard the interests of its members in the establishment of the new airline and advocate for the re-employment of former SAA employees and transformation among other things.