The Department of Public Enterprises says the South African Airways (SAA) rescue process has been derailed by trade unions whose actions have set the airline on the path to liquidation.
This follows the National Union of Metalworkers of SA, the SA Cabin Crew Association and the SAA Pilots Association, together with several creditors, seeking last week to postpone a decision on the business rescue plan until 14 July.
Minister Pravin Gordhan has tried to persuade all parties to support the plan and entered into a leadership compact with unions to do so.
The department said it was withdrawing from the consultative forum with organised labour to develop a new and restructured SAA. If the plan is rejected and an alternative not proposed, SAA will be placed into provisional liquidation.
Gordhan’s proposed plan specifies that the department provide a letter of commitment, with the support of the Treasury, to confirm that it will provide funding for a new national airline. The additional funding required includes R2.8bn to restart operations and a liability provision, bringing the total to R10.4bn.
But no money was set aside for SAA in the supplementary Budget Review tabled by finance minister Tito Mboweni last week, creating doubt about whether it will materialise. On Friday, the cabinet said it supported a new SAA but gave no indication of financial support.
Part of the objective of the compact had been to secure a better deal for employees than liquidation would offer. The rescue plan theoretically also offered employees a better deal, but the majority said the plan was unrealistic.