This archive report was first published on 8 May 2020.
South African Airways (SAA) staff are breathing a temporary sigh of relief after the deadline for agreeing to layoff terms was suspended pending a court ruling.
State-owned SAA has been struggling to stay afloat since entering a form of bankruptcy protection in December 2019. The COVID-19 pandemic further exacerbated its financial woes when it was forced to halt all commercial passenger flights and the government refused to provide further funding for turnaround efforts.
Administrators seeking to rescue SAA had initially set a deadline of May 8 for unions to agree to severance terms. If the deadline was not met, a layoff agreement would be offered to all staff, with a final deadline of May 11 for employees to accept the terms.
However, in a court case brought by the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA), a judge has been asked to consider the implications of the proposed layoff agreement.
According to an email sent to SAA staff, the administrators have decided to suspend the timelines until the court's ruling has been handed down. The email stated: 'In according the appropriate respect to the court and to ensure that our decisions are appropriate, we have decided to suspend the time lines as communicated in our letter and communication dated 3 May 2020, until the court’s ruling has been handed down.'
The administrators have until the end of the month to draft a business rescue plan for SAA, which has not made a profit since 2011 and has received bailouts worth over 20 billion rand ($1.1 billion) over the past three years.
Public Enterprises Minister Pravin Gordhan has stated that the government wants to avoid a liquidation or fire sale of SAA assets, preferring to see the airline restructured into a new entity.
SAA has announced that it will continue to operate repatriation and cargo flights 'during the month of May and beyond'.
