SAA on the skids

The news that yet another South African Airlines (SAA) CEO, Zuks Ramasia, has resigned is a further indication that SAA cannot be rescued.

It must surely be clear that the extension to the end of May 2020 for Les Matuson and Siviwe Dongwana, the business rescue practitioners, to produce a business rescue plan is simply going to delay the inevitable liquidation of SAA.

This unprecedented two-month extension given to the business rescue practitioners by the SAA creditors will result in billions of rands of unnecessary taxpayer bailouts to meet SAA overhead costs such as fixed contracts and employee costs. Not to mention the millions of rands now being paid to Matuson and Dongwana and their very expensive additional staff and/or consultants appointed in terms of the business rescue process.

All this at a time when SAA has virtually no revenue for at least three weeks with most, if not all aircraft grounded because of the Covid-19 lockdown.

Despite the urgency of the situation, Matuson and Dongwana have not acknowledged a letter from the Democratic Alliance (DA) sent to them a week ago urging them to invoke section 141(2)(a)(ii) of the Companies Act 71 of 2008, and to apply to court for the SAA business rescue proceedings to be discontinued and for the airline to be placed in liquidation. A rather unfortunate indication of the apparent disdain with which they hold parliament and its members.

The DA has submitted a written parliamentary question to Pravin Gordhan, the Minister of Public Enterprises, to request details of the costs of the business rescue practitioners, as well as all the additional people and consultants employed or commissioned by Matuson and Dongwana.