SAA business rescue practitioners only have one option – liquidation
25 April 2020
While the global airline industry is on life support, South African Airways’ (SAA) Business Rescue Practitioners (BRPs) have issued a statement to all affected persons stating that the prospects of further government bailouts has dimmed to zero.
The BRPs are now calling for either a process involving employees to develop a business rescue plan or in the absence of such agreement with employees, an urgent application for a court order discontinuing the BRP proceedings and placing SAA into liquidation.
It is unclear what employees may have to offer apart from their continued, and mostly hitherto valuable services, which SAA can no longer pay for – by the BRPs own admission – beyond 30 April 2020. Moreover, any ”creative solution” as called for by the Inter-Ministerial Committee, would require – as previously stated by the Democratic Alliance (DA) – new partnerships, privatisation measures involving the airline and its subsidiaries, and regulations changed to allow foreign ownership to be in excess of the current capped level of 25%.
Whether this is possible under current Covid-19 circumstances affecting the industry is anyone’s guess. Virgin has fired more than 3 000 people including 600 Pilots, Finnair has returned 12 planes and laid off 2 400 people. Low-cost operators like You and Ryan Air have grounded 22 planes and fired 4 100 people, and grounded 113 planes and fired 900 pilots respectively.