The Department of Public Enterprises (DPE) on Wednesday assured that it was “working around the clock” to implement the business rescue process for the State-owned national flag carrier South African Airways (SAA). The implementation conditions for the airline’s business rescue plan were met during the first week of this month.
The department reported that there were four elements to the business rescue process. These were the restructuring of SAA, the creation of a new board and management team, the contracting of transaction advisors, and the establishment of a modern, customer-centric airline.
The restructuring element included the implementation of the employee retrenchment process. This would leave a staff complement of only 1 000, who would launch the new airline. Another 1 000 would be assigned to a “temporary training layoff scheme” with the aspiration of being recruited back into the airline as it expanded and jobs became available.
The DPE also assured that the new board would be “smaller, effective, reinforced, and empowered”. This new board would then appoint the airline’s new executive management, which would include a chief operating officer, a chief information officer and a chief risk officer.
“The DPE has identified a Transaction Advisor whose mandate is to assist the department in transaction planning, feasibility analysis, procurement and implementation of transactions and raising funds and investments for the new airline,” said the department in its statement. “The DPE welcomes the attraction of a mix of local and international investor groups to provide the new airline with technical, financial, and operational expertise to ensure significant South African ownership whilst diversifying the investor base.”
Regarding the new airline, the department expressed several desires about its nature. First, it stated that the government would maintain “a certain level of presence in the ownership of the new carrier”. Then it stated that the new fleet should be composed of cost-efficient modern aircraft, providing “hybrid density options”. The airline should offer the “right” routes and services with tariffs that were competitive.
Further, it should have a “network structure that allows for connectivity at hubs, whilst maintaining elevated aircraft utilisation”, linking “Africa to world economic hubs whilst maintaining diplomatic connectivity”. The workforce should be “right-sized and motivated”. The new operation should be “customer-centric … lean, technology savvy, digitally native and agile to service all market segments”.