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Public Enterprises Withdraws From SAA Restructuring Forum

The Department of Public Enterprises has on Sunday announced its withdrawal from the forum tasked with coming up with a business restructuring model for the embattled South African Airways (SAA).

The department said it withdrew from the Leadership Consultative Forum (LCF) as it is not serving its intended purpose, which is:

• to present an agreement to the Business Rescue Practitioners (BRPs) of SAA in support of the business rescue plan for the airline, or to make meaningful proposals towards an amended business rescue plan;
• to make joint submissions to the BRPs on voluntary severance packages that is are fair and equitable for SAA employees who are going to be retrenched;
• to provide joint leadership while SAA is undergoing a fundamental restructuring of its operations and cost structure;
• to help ensure that SAA can resume its flight operations as soon as possible; and
• to cooperate and contribute towards the formation of a new airline, with the participation of a strategic equity partner.

The LCF was formed by the department together with labour unions as part of a business rescue process to fill the vacuum when the business rescue practitioners failed to meaningfully consult with SAA employees and their unions.

LCF contributors agreed that a leadership crisis, corruption and mismanagement, over many years at SAA caused its financial crisis which the COVID-19 pandemic had aggravated.

Among others, the vision of the forum was to “support the transformation of the SAA into a strategic national asset which is internationally competitive, sustainable and profitable and which is not dependant on the fiscus,” recognition that the restructuring of the airline must save as many jobs as is consistent with a viable, competitive airline.

Public Enterprises listed the following as its list of reasons for withdrawing:

On several occasions, some participants of the LCF have wilfully breached the conditions of the Leadership Compact by leaking confidential information, issuing public statements that attack the DPE and political attacks on the DPE leadership. Also:
• By supporting SA Airlink’s resolution to adjourn the Creditors meeting, the actions of the NUMSA, the SA Cabin Crew Association (SACCA) and the SAA Pilot’s Association (SAAPA) have contradicted the letter and spirit of the Leadership Compact;
• These actions put severance benefits for employees and the retention of 1 000 jobs now, and 2900 jobs as flights ramp up, at risk by supporting the postponement of voting on the business rescue plan. This postponement also creates uncertainty for creditors and potential investors;
• Instead of creating conditions for attracting investment and skilled South Africans, three unions have put SAA on a path towards possible liquidation; and
• In supporting SA Airlink to postpone the creditors’ vote, NUMSA, SACCA and SAAPA have effectively aligned themselves with a competitor who stands to benefit substantially should SAA be liquidated. This is an anti-worker stance.

“After not receiving salaries for three months it has become apparent that SAA employees do not want further delays for the business rescue process to be concluded. They want greater certainty, particularly about their severance benefits and for SAA to resume its flight operations and re-occupy its market share,” the department said.

“The DPE wishes to thank the National Transport Movement, the SA Transport Workers Union, non-unionised workers and Solidarity for their cooperation, constructive engagements at the LCF and their efforts to bring the business rescue process closer to finality, in the interests of SAA employees.”