Solidarity brings High Court application to save SAA
12 April 2018
In what could be considered a historical case, Solidarity today announced that it would approach the High Court to have South African Airways (SAA) placed under business rescue. As a trade union, Solidarity is able to make this application as an “affected person” under the business rescue provisions of the Companies Act.
If Solidarity succeeds in its bid, it would be a first for a state enterprise to be placed under business rescue. A team of experts led by a business practitioner would put plans in place to save the SAA.
Several political parties and civil organisations have already proposed that SAA be placed under business rescue, and in a recent report the Auditor-General (AG) wanted to know why it had not yet happened.
Solidarity’s action follows after the AG indicated in a report that SAA had suffered a total loss of R5,6 billion in 2017. The AG also indicated that there was concern about the SAA’s status as a going concern. Based on SAA’s financial statements we can see that since 2016 the SAA’s operating loss has increased by 1 000% to R3,7 billion. Disturbingly, SAA recently advised Parliament that they will likely lose a further R5 billion for 2018.