Today's Labour News

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saa thumb medium95 76Moneyweb reports that South African Airways (SAA) needs R5 billion immediately, which is in addition to the R10 billion it got from the fiscus in the previous financial year to restore its status as a going concern.  

But, that will be nowhere enough because according to deputy finance minister Mondli Gungubele, SAA needs at least R20 billion in order to break even by 2021.  That is R9.2 billion to repay debt that matures in March next year and another R12 billion to address its “negative equity position”.  Expenses exceed income by R370 million per month.  To be profitable and compete with its peers, it needs new aircraft, which it cannot buy.  Against this background Solidarity is planning to apply to the High Court to place SAA in business rescue.  Head of Solidarity Research Institute Connie Mulder advised that the trade union would file its papers on 15 May and has decided on this course of action in an effort to prevent SAA from being liquidated.  Solidarity believes SAA can still be saved and with it, the jobs of its members.  The Free Market Foundation’s Leon Louw differs sharply.  He says the only viable options are liquidation or privatisation.  It is too late to “rescue” SAA, Louw claims.  Transport economist Dr Joachim Vermooten points out that the court would only grant Solidarity’s application if it can show that there is a reasonable prospect of rescuing the group.  It is very late in the day for SAA, Vermooten says.  Whether the court can be convinced, remains to be seen.

  • Read this report by Antoinette Slabbert in full at Moneyweb

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