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Unions' stance puts SAA on very risky path to liquidation - DPE

30 June 2020 8:50 AM
Tags:
SAA
Business Rescue Practioners
Business Rescue Plan
DPE

Nonny Mashika Deputy Director-General for Aviation at the Department of Public Enterprises discusses the way forward.

The Department of Public Enterprises (DPE) on Sunday announced its withdrawal from the Leadership Consultative Forum it had spearheaded, tasked with coming up with a business restructuring model for the struggling South African Airways (SAA).

RELATED: DPE tells unions 'stop politicking, SAA employees' livelihoods are what matter'

Nonny Mashika Deputy Director-General for Aviation at the Department of Public Enterprises speaks to Refilwe Moloto about the vision for the future of SAA, now that the department has withdrawn from the forum.

Mashika says the aim of the forum was to assist in the engagement between the unions and the business rescue practitioners.

We had to intervene between the business practitioners and the unions...and the whole point of the forum was for us to engage on the business model and make sure that we finalise it.

Nonny Mashika, Deputy Director-General for Aviation - Department of Public Enterprises

But she says the turn of events on 25 June, when the unions voted for the adjournment of the creditors' meeting has placed the entire process on hold.

The process of voting on the proposed business rescue plan for the beleaguered airline has now been halted.

This has raised a challenge for us of course because we would have liked to see the voting on the business rescue plan to make sure we see the emergence of a sustainable airline going forward. So the department has decided to withdraw its participation.

Nonny Mashika, Deputy Director-General for Aviation - Department of Public Enterprises

Why was the department involved at all?

Mashika says the Business Rescue Practitioners (BRPs) who were appointed by the SAA board, had not engaged with the unions sufficiently and so DPE felt it was critical to become involved in assisting in that process.

One of the key issues the department was concerned about was the challenges labour would face with regard to the displacement of employees, she explains.

As required by the Companies Act, employees need to be consulted through this process to ensure an amicable solution is found for the entity and the workers - so it was critical that we get involved irrespective that the BRPs were in place.

Nonny Mashika, Deputy Director-General for Aviation - Department of Public Enterprises

She says the unions' claims that the department has been disingenuous is unfortunate considering the efforts made over a considerable period of time to put forward the business models and voluntary severance packages (VSPs) through the BRPs.

At this point in time, as union leadership, they are also looking after their own interests in terms of the interests of employees or the interests of labour - but we realise that with the restructured airline there will be an impact on labour.

Nonny Mashika, Deputy Director-General for Aviation - Department of Public Enterprises

The reduction of employees at the restructured airline is a key issue.

It is rather unfortunate that labour has taken the stance that it has by voting on the adjournment of the creditors meeting. This puts SAA in a very risky situation towards the path of liquidation.

Nonny Mashika, Deputy Director-General for Aviation - Department of Public Enterprises

She adds that government does not want this to happen as it wishes to see the emergence of a sustainable airline that is agile, tech-savvy and able to compete globally.

Why does government need to own the airline, asks Refilwe?

Mashika responds that government is reviewing the ownership model, but at this point in time, they do see government playing a large role because aviation is considered a strategic industry to the country.

She emphasises that the restructured airline needs to be commercially viable and also achieve its developmental mandate which includes tourism and job creation.

Moving forward we want a sustainable airline. We cannot continue to fund the airline indefinitely, and that is why we have also looked at different funding models for the entity to make sure it gets back into the air.

Nonny Mashika, Deputy Director-General for Aviation - Department of Public Enterprises

Listen to the interview below:


30 June 2020 8:50 AM
Tags:
SAA
Business Rescue Practioners
Business Rescue Plan
DPE

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