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Troubled S/African Airways needs $600m to fly again – Official

The South African government will need US$600 million to get the beleaguered South African Airways (SAA) back in the air…

The South African government will need US$600 million to get the beleaguered South African Airways (SAA) back in the air following the approval of the airline’s restructuring by its creditors, APA learnt on Wednesday.The SAA, which has 4,700 workers, will lose 2,500 members of staff to the restructuring process as the cash-strapped national carrier makes way for a smaller and more profitable airline serving reduced routes starting next year.

The workers who are scheduled lose their jobs have agreed to receive voluntary severance packages amounting to US$130 million, according to the business rescue plan agreed to by their unions and the airline last week.

The Ministry of Public Enterprises on Wednesday confirmed that the restructuring plan would be financially supported by the government and that all the necessary resources would be mobilised to get the SAA back into the skies.

“The cabinet has expressed its support for the concerted effort to mobilise funding (US$600 million) from various sources to finance the business rescue plan, including from potential equity partners, for the uptake of the new airline,” Kgathatso Tlhakudi, the ministry’s director-general, said on Wednesday.

The ministry noted that it had already committed to the airlines’ unions to pay them some $130 million worth of voluntary severance packages for their workers.

In spite of this, economist Duma Gqubule said he believed the airline workers were the biggest losers in the rescue plan of the SAA which has been mismanaged for two decades.

“It’s a very sad day for SAA which has had a history of two decades of mismanagement, with government appointing conmen to be in charge of the airline.

“Now the workers are suffering despite having nothing to do with the airline’s problems,” he said, adding that “we should have kept SAA on life support until the industry turned the corner. That’s my view.”

On her part, labour federation Cosatu’s Sizwe Pamla said: “What is key for us is to ensure that all efforts are taken to minimise job losses and the airline is put on a sound and sustainable footing.”

Meanwhile, the government announced that it had appointed former IATA official and Air Malta executive Phillip Saunders as the interim Chief Executive Officer to guide the embattled airliner through the turbulence of its new journey to recovery.

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