Solidarity union to continue with SAA business rescue plan despite latest bailout
The Solidarity trade union will continue with its court application to place State-owned flag carrier South African Airways (SAA) under business rescue, despite another government bailout for the airline, the union announced on Friday. This follows a statement on Thursday by SAA CEO Vuyani Jarana that the government had promised another R5-billion (about $400-million) capital injection for the carrier.
SAA has not recorded a profit since 2011 and has so far received State guarantees totalling close to R20-billion. Since 2012 it has racked up losses totalling R32-billion, Solidarity reported. The airline needs the latest injection in order to help pay its debts and prop itself up.
In its press release, the union stated that this latest bailout confirmed that the airline was not a going concern. The new injection was merely a short-term relief for SAA, “merely sticking a plaster on a problem”, in Solidarity’s words. The government was simply repeating the same pattern as before. “Doing more of the same will not save SAA.”
“Carrying on with the current strategy is not right and it is not fair to the taxpayer,” affirmed Solidarity Research head Connie Mulder. “With each bailout taxpayers are getting poorer.”
“If we keep on doing the same things with SAA we will be getting the same results,” he stressed. “This means that taxpayer’s money will still be thrown by the billion down the plunder pit that SAA has become. The time has come for the taxpayer to be protected by means of a radical external intervention that comes in the form of business rescue.”
The union was to meet with its legal team on Friday, to consider the latest news concerning the airline as well as to finalise its court papers. The papers applying for the business rescue of SAA will be served before the end of this month.
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