Today's Labour News

newsThis news aggregator site highlights South African labour news from a wide range of internet and print sources. Each posting has a synopsis of the source article, together with a link or reference to the original. Postings cover the range of labour related matters from industrial relations to generalist human resources.

saa thumb medium95 76BL Premium reports that South African Airways (SAA) is again in a perilous situation after the R2bn it was promised by the Treasury to fund the business-rescue process failed to materialise.  

Without this funding the national airline could be forced to suspend flights by 19 January, and could go into liquidation, which would involve selling its assets to pay creditors.  SAA was placed in business rescue in December as it did not have working capital to fund operations.  Announcing the business rescue, public enterprises minister Pravin Gordhan said the airline would receive R4bn in post-commencement financing to enable the business to continue while a rescue plan was put in place.  Half of this was to come from existing lenders and would be repayable from future budget appropriations; and R2bn from the Treasury, which would be provided in "a fiscally neutral manner".  While the R2bn from lenders was made immediately available, the Treasury was required to sell assets, which it has been unable to do within the narrow timeframe.  A spokesperson for business rescue practitioner Les Matuson confirmed on Monday that the funds were needed and had not been received.  On Wednesday, Matuson met SAA trade unions and informed them that the government had undertaken to provide a decision on the funding by 19 January.  "If they don’t get the money by the 19th then they will have to suspend flights," said a union participant.  It is believed that intense efforts are under way to persuade lenders to extend another R2bn in bridge financing to be repaid when the Treasury raises the funds from asset sales.  SAA employs about 10,000 people across the parent company and subsidiaries.

  • Read the full original of the report in the above regard by Carol Paton at BusinessLive (paywall access only)
  • Read too, Mboweni says government needs funding for troubled airline SAA, at Engineering News

Get other news reports at the SA Labour News home page