Government meets with SAA unions and there’s still no money for the airline

The inter-ministerial committee on South African Airways (SAA) has reaffirmed government’s position that there is no more money available for the embattled airline at its meeting with unions on Tuesday.

Instead, the committee’s chair Public Enterprises Minister Pravin Gordhan, Labour Minister Thulas Nxesi and Tourism Minister Mmamoloko Kubayi-Ngubane told the airline’s labour representatives that all stakeholders had to “commit to a creative solution for SAA to avoid a scenario where the business rescue is deemed to have failed”.

Unions and the government delegation agreed that a “consultative forum will be established to advance dialogue and consultation on the process ahead,” the Department of Public Enterprises said in a statement.

The parties also agreed to work together to ensure that a competitive and financially viable airline which is not dependent on the fiscus would emerge from the business rescue process.  

“Unions agreed that in arriving at a solution for SAA, some jobs will be lost, and that employees that remain behind will need to sacrifice some of the unaffordable arrangements that had worsened the airline’s financial position.

The department said “social plans” would be created for workers who are going to lose their jobs. 

Read: Unions respond to SAA severance package offer

The meeting with all the eight trade unions recognised in SAA, and representatives of the non-unionised employees comes after the airlines business rescue practitioners (BRPs) Les Matuson and Siviwe Dongwana sent employees a draft proposal on severance packages for all employees. 

Matuson and Dongwana said given government’s refusal to sustain the business rescue process with an additional R10 billion in funding it was unlikely that the airline would be saved. 

Employees who have also been meeting with the BRPs this week have until Friday to accept the agreement that could see employee contracts terminated by April 30. After which, they would have to wait between six months and 24 months to hear whether the airline will be able to pay their severance packages in full or partly from the sale of selected assets. 

Read: Cash-crunched SAA proposes termination of employee contracts 

On Monday Gordhan also presented a report on the airline to President Cyril Ramaphosa and his cabinet.

A statement from cabinet gave no detail about the report of the fate of the airline’s future except to say that Gordhan should resubmit a consolidated report on the airline following the inter-ministerial committee’s meeting with organised labour this week.  

Both statements come ahead of Ramaphosa’s expected address to the nation where he will provide details on the additional economic and social relief measures that the government will put in place to respond to the Covid-19 pandemic.

Source: moneyweb.co.za