There has been mixed reaction from unions representing employees of South African Airways (SAA) to the approval of the business rescue plan for the financially embattled State-owned national flag carrier. The plan was approved by 86% of the airline’s creditors in a vote on July 14. The approval of the business rescue plan was welcomed by the SAA Pilots Association (SAAPA) and greeted with relief by the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca). But it was met with dismay by Solidarity.

For the SAAPA, the vote would “go a long way towards providing a path forward, after an immensely fraught period”. Exiting business rescue was in the best interest of the airline, its employees and all affected parties, and the approval of the business rescue plan was the first step out of business rescue.

“The approval of the business rescue plan must usher in a new era of transparency and accountability at the airline, if SAA is to succeed,” asserted SAAPA. “We hope that the new interim board to be appointed soon will be made up of diverse and experienced individuals, with business acumen and airline experience, who are determined to put SAA on a path to profitability, prosperity and growth, free from political interference and meddling.”

“Although we are not entirely satisfied with the plan . . . we are relieved that the drawn-out and rather wasteful business rescue process is now coming to an end,” said Numsa and Sacca in a joint statement. “We have fought very hard to prevent the liquidation of the airline and we are relieved that this strategic State-owned entity (SOE) which plays such a crucial role in the aviation and tourism sector, has been saved from total collapse.”

“It remains our expectation that the [Department of Public Enterprises] will honour the principles agreed upon in the consultative agreement to have a new board that excludes all the current board members, and that a new team of senior executives will be appointed through a transparent process,” added Numsa and Sacca. “It is also crucial that labour must have representation on the board. For too long, employees at SAA have seen the airline run down by shareholder Ministers, and the boards and executives are never called to account for their actions at the airline.”

“The approved business rescue plan does not address any of the key problems,” dissented Solidarity Research Institute head Connie Mulder. “The plan inevitably means that taxpayers will be confronted with bail-outs to the struggling airline for years to come due to the pride and vanity of the government. In a manner of speaking, the business rescuers, creditors and the Department of Public Enterprises have placed a band-aid on a patient who needs open-heart surgery – we will soon be in the same situation again.”

Mulder also attacked government for planning to allocate billions of taxpayers rands to SAA against the backdrop of the Covid-19 pandemic. “Questions need to be asked about a State that uses tax money to save a struggling and unnecessary State enterprise while the entire country’s economy and health care system are collapsing,” he argued. “Should the government provide the funding as required, it would imply that the government will spend 150 times more on one airline than the amount received by the entire tourism industry. In fact, the government is going to spend approximately the same amount of money on the SAA’s [sic] turnaround process as it has spent on aid to all South African citizens who have temporarily lost their jobs. That is outrageous.”

The appointment of Philip Saunders as SAA interim CEO also divided the unions. It was welcomed by SAAPA but not by Numsa or Sacca and ignored by Solidarity.

“The appointment of Philip Saunders … with his experience in the airline industry, is encouraging,” affirmed the pilots association. “SAAPA has repeatedly emphasised the value and necessity of competent leadership with experience in the airline industry, and we hope that the interim appointment of Mr Saunders marks an important step in the right direction for the airline.”

“We have noted that Philip Saunders has been appointed as interim CEO of the airline,” stated Numsa and Sacca. “Philip Saunders is currently the chief commercial officer at SAA and therefore a member of the current executive management at the airline. He is part of the very same disastrous management team which brought the airline to the brink of collapse . . . We need fresh ideas and visionary, dynamic leadership without the baggage of the past, if we are to succeed in turning the airline around.”