SAA close to total collapse, losing R15 million each day

SAA losing-R15million-each-day
SAA losing R15 million each day

Solidarity said SAA is on its way to total collapse and has brought an application to place the airline in business rescue.

The union today served court papers on SAA and the Ministers of Finance and Public Enterprises, asking the court to place the company in business rescue.

If Solidarity’s application is successful, it would be the first time that this has happened to a state enterprise.

This would mean that the court could appoint a business rescue practitioner with comprehensive powers to rescue the airline.

Solidarity argues that business rescue is essential for the sake of the security of its members at SAA, as well as for the sake of taxpayers in South Africa.

“SAA is heading for liquidation which will have huge consequences for employees, the South African economy and for taxpayers,” said Solidarity COO Dirk Hermann.

Hermann argued a business rescue application is the only remaining option to limit the damage, especially after the recent strike accelerated the crisis at SAA.

Losing R15 million each day

Solidarity Research Institute head Connie Mulder said SAA’s 2017 financial statements showed there was a loss of R5.569 billion at the state-owned airline.

“This means that R15 million was being lost per day. Every hour, we are losing R635,730, and every minute R10,595,” said Mulder.

He added that since 2017 no new SAA statements have been published and it can be assumed that the situation is only getting worse.

Solidarity said that the situation within SAA has deteriorated further and faster with the notice of retrenchments, the cash loss from the strike, and the loss of confidence in the airline.

The union added that the company’s debt burden grew to R33 billion and that it is “hopelessly insolvent”.

“To wait until SAA turns around perfectly by itself, given the history, is irresponsible and is not grounded in the reality that this enterprise is on its way to total collapse,” said Hermann.

“Business rescue offers an opportunity to make an emergency landing instead of aiming for disaster.”

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