SAA can’t expect more bailouts once new equity partner gets appointed: Gordhan

Public Enterprises Minister Pravin Gordhan says once a new equity partner for South African Airways (SAA) is appointed, the airline will have to stand on its own and cannot expect further financial assistance from government.

Gordhan says negotiations with the prospective strategic equity partner are at an advanced stage. He says a decision will be announced in the next four to six weeks. Addressing members of the Public Enterprises Committee, Gordhan said all that will be left is for government to conclude the R14-billion funding to service its financial commitments.

“We’ve made it very clear to ourselves and to others including various Parliamentary structures that SAA will not be expecting nor should it request any further money from government itself. The SEP partner comes in with new cash to operate the new airline and government takes responsibility in terms of the R10.5 billion plus the remainder it takes us to R14 billion to “clean up” the airline and the historic costs of the airline,” says Gordhan.

Discussion with SAA’s interim CEO on his strategy post business rescue

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Negotiations with SAA pilots

The Acting Director-General of Public Enterprises, Melanchton Makobe, says negotiations with SAA pilots about their conditions of service are close to being finalised.

He says the remaining issue is new demands by the pilots. Members of the SAA Pilots Association have been locked out of the workplace since December last year. They then went on strike to prevent scab labour from being used by the airline. There’s a long-running dispute about the historical benefits of the pilots, which government and SAA both maintain are unsustainable.

Makobe says if there’s no agreement, a legal process that is currently under way will go ahead.

“The amount of the VSPs have been agreed on. What is outstanding is the further demands that the pilots have made for the cancellation of the regulating agreement that they want to be paid for the three months that they were locked out. Once that issue has been finalised, then the VSPs can be paid to the pilots and they can exit the system,” says Makobe.

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