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The Department of Public Enterprises (DPE) said Saturday that it had cornered an international aviation company to help with the formation of a new airline to replace the attacked South African Airways, which is currently under commercial rescue.
A senior department official also stated that Minister Pravin Gordhan had successfully concluded a “leadership pact” with unions that aims to ensure a “smooth transition” to a new SAA.
“The DPE has secured the services of the international aviation consulting firm to help with the development of the airline’s new architecture. The work is due to be completed in a few weeks as operating funds are rapidly running out at SAA,” he said. Acting Director General Kgathatso Tlhakudi.
The name of the firm was not disclosed.
Tlhakudi added that private equity will play a role in the realization of the new airline concept, including the provision of “airline management know-how”.
The struggling national airline has been on voluntary commercial rescue since December last year. Business rescue professionals late last month said the airline cannot survive beyond the end of the month, and the options left are a forced liquidation or a liquidation process.
Tlhlakudi said the closure of SAA and the emergence of the new airline are expected to unfold within the commercial rescue window.
Business rescue professionals Les Matuson and Siviwe Dongwana had indicated that they did not have sufficient funds available to continue meeting SAA’s obligations to its employees beyond April 30, 2020. They had given unions a deadline of 1 May to respond to the proposed termination of employment for thousands of SAA employees in terms of a Section 189 notice delivered in March.
The airline’s troubles were further compounded by the government’s decision to reject a request for further financial support for the trade bailout process, after a total of R5.5 billion at startup was mined and fully utilized in March 2020.
SAA’s demise would mark the end of the era for the 86-year-old airline that had gone through years of associated financial problems and high debt associated with mismanagement.
The BRPs replied that they have no comments at this stage.
* Additional contribution from Carin Smith
