Aviation consultancy to map out new airline to replace SAA, says DPE

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The Department of Public Enterprises (DPE) said on Saturday it had roped in an international aviation firm to assist with the formation of a new airline to replace the embattled South African Airways which is currently under business rescue.

An top official from the department also stated Minister Pravin Gordhan had successfully concluded a “leadership compact” with labour unions which is aimed at ensuring a “smooth transition” to a new SAA.

“The DPE has secured the services of international aviation consultation firm to assist with the development of the new airline architecture. The work needs to be completed within weeks, as operational funds are running out fast at SAA,” said Acting Director General Kgathatso Tlhakudi.

The name of the firm was not revealed.

Tlhakudi added that private capital will play some role in the realisation of the new airline concept including the provision of “airline management know-how”.

The embattled national carrier has been in voluntary business rescue since December last year. The business rescue practitioners late last month said the of airline cannot survive beyond month end, and the choices left are either a forced liquidation or a winding down process.

Tlhlakudi said the winding down of SAA and the emergence of the new airline was expected to unfold within the business rescue window.

The business rescue practitioners, Les Matuson and Siviwe Dongwana had indicated that they do not have sufficient funds available to continue honouring the obligations of SAA to its employees beyond 30 April 2020. They had given unions a May 1 deadline to respond to the proposed termination of employment for thousands of SAA employees in terms of a Section 189 notice served in March.

The airline’s troubles were further worsened by government’s decision to reject a request for further financial support for the business rescue process, after a R5.5 billion in post commencement was fully drawn and utilised in March 2020.

The demise of SAA would mark an end of era for the 86-year old airline which had gone through years of financial troubles associated and high debt associated with poor management.

Source: Sibongile Khumalo –www.fin24.com

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