The Department of Public Enterprises (DPE) welcomed the outcome of the creditors’ vote on the proposed business rescue plan for State-owned South African Airways (SAA). The financially beleaguered national flag carrier is under business rescue.
In the vote on Tuesday, 86% of the creditors voted in favour of the plan. “The DPE believes that the favourable vote is a much better outcome for creditors and SAA employees than liquidation, and the government remains confident that the implementation of the business rescue plan will balance the rights and interests of all parties,” it affirmed.
“The priorities for the DPE are now to give effect to funding commitments by the government for the business rescue plan, appoint a new, and reconfigured board for SAA,” it added. The department also announced that the interim SAA CEO will be Philip Saunders, whom it described as an “experienced airline executive with a strong commercial background”.
Saunders would work with the interim board to create an interim management team. The interim board, CEO and management would then fundamentally restructure the airline.
The DPE assured that the government was committed to arranging the financing necessary to implement the business plan. This included funding the voluntary severance packages for retrenched SAA employees, agreed with the unions.
“The department hopes that a new SAA can reclaim market share while fighting to compete more in the emerging market space – notwithstanding the impact of the Covid-19 pandemic that will constrain the aviation industry for some time into the future,” it stated. “The SAA shareholder appreciates the level of commitment and cooperation from unions and staff representatives who have accepted fair and reasonable severance packages in the interest of their members, at a time when the devastating consequences of the Covid-19 pandemic are causing thousands of job losses in the global aviation industry.”