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SAA – no flights before May

19 Feb 2021 - by Sarah Robertson
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SAA has notified trade partners that its suspension of flights will continue up to and including April 30. This has thrown cold water over the hopes raised by the Minister of Public Enterprises’ prediction that SAA would exit business rescue by the end of February.

The airline’s notification stated that the further suspension was due to the ongoing business rescue process and regulations pertaining to COVID-19.

Public Enterprises Minister Pravin Gordhan said earlier this month that if all went well, SAA could exit its business rescue process by the end of February. The Minister said the airline’s Business Rescue Practitioners (BRPs) would have to confirm a list of outstanding activities before they could file a notice that the rescue plan had been substantially implemented. He added that he expected an interim SAA board to be in place for the next few months.

Some progress

Meanwhile, some progress does seem to have been made relating to payment of outstanding funds. News24 reported that it had had sight of a leaked document from the BRPs to SAA employees, where the BRPs stated that they had now received the outstanding funding for the business rescue process from the Department of Public Enterprises.

In the letter, the BRPs advised employees that they were moving forward with the payment of voluntary severance packages (VSP) for employees, and these were expected to be made in two batches, with the first portion to be paid this week. The second portion will be paid after SAA has attained tax directives from SARS showing that VSP applicants have valid tax numbers and that their tax filing is up to date.                                        

Part one of the VSP payments is expected to include one month’s notice pay, payment of the full entitlement of accrued leave at the date when the voluntary severance agreements were signed, a pro-rata 13th cheque if applicable, and 2019 salary increase backpay, if applicable.

Part two will consist of one week’s remuneration for each completed year of service, a VSP top-up, if applicable, and a VSP incentive, if applicable

SAA’s customer service department appears to have sprung to life and started responding to emails again. Owner of Take Off Travel, Owain John, said he had had some correspondence with SAA’s customer service team over refunds.

Equity partner

The DPE continues to assert that it has identified a number of equity partners for SAA. In an interview with Bloomberg last week the Minister said three equity partners had been identified and that the government would make a decision on which one to pick in the next month or so.

Ethiopian Airlines, widely believed to be one of the candidates, said in October last year that it was willing to provide aircraft, pilots and maintenance services to SAA, as part of a joint venture, but said it was not interested in taking on the airline's legacy issues, such as Its debt.

Reports this week quote Ethiopian Airlines ceo, Tewolde Gebremariam, saying that talks regarding co-operation with SAA were making slow progress. He was reported in Flight Global saying: “We are still discussing but I would say we have not made the expected progress.” 

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