Public enterprises ‘not serious about building new airline’

There is still no end in sight to the wrangling over cash-strapped SAA
GOING NOWHERE: There is still no end in sight to the wrangling over cash-strapped SAA
Image: RICHARD VAN DER SPUY/ 123RF

 

The majority trade unions at SAA have called the department of public enterprises dishonest, when it accused  them of derailing the airline’s rescue process.

The department said in a statement on Sunday that it has withdrawn from the leadership consultative forum (LCF) it had established with organised labour to develop a new and restructured SAA, and that the unions’ actions had set the airline on the path to liquidation.

This was after majority trade union the National Union of Metalworkers of SA (Numsa), the SA Cabin Crew Association (Sacca) and the SAA Pilots Association, alongside several creditors, sought to postpone a decision on the business rescue plan until July 14, at a crucial meeting of creditors held last week.

Public enterprises minister Pravin Gordhan has tried to persuade all parties to support the plan. The effort included a leadership compact with unions.

The airline, which is not financially viable, has been in business rescue for six months.

But the process has not been completed due to ongoing delays in finalising the business rescue plan.

The plan was eventually to be put to a vote on Thursday.

If the plan is rejected and an alternative not proposed SAA will be placed in provisional liquidation.

Numsa and Sacca accused the department of pretending to be serious about building a new airline with a turnaround strategy, when in reality they were actually destroying the airline.

“If anything, what will be left of SAA will not be a vibrant and successful airline but a shadow of the airline as we know it,” they said.

The unions said the leadership compact was collapsed on the grounds that unions refused “such an agenda”.

They said the business rescue practitioners had not consulted labour in the development of the recent plan, and the collapse of the leadership consultative forum by the department was a way of legitimising that the unions should not be consulted in the development of the turnaround plan as stated in the Companies Act.

“What has really collapsed the LCF engagement with the department of public enterprises are the positions advanced by the department of public enterprises that are tantamount to the destruction of SAA and its future,” Numsa and Saaca said.

“It is clear that the only inference we can draw from this is that the department of public enterprises realises that we have exposed their intentions to manage unions within the LCF, and that it has not engaged in good faith.”

The SAA pilots said there were contradictions between the department of public enterprises’ statement on Sunday and the letter issued to labour at the same time.

The union said the letter stated that the department wanted to try to rebuild the constructive relationship that existed before the publication of the draft rescue plan.

“We are disappointed by some of the reaction from the department of public enterprises but remain hopeful that they will follow through on their commitment to engage constructively and join us in working towards a pragmatic solution to the benefit of all,” Saapa said.

“Saapa has been advocating for this for the last two weeks and before that, and so are pleased at this entreaty as it is one of the three fundamental reasons that we brought the motion for an adjournment of the creditor’s meeting.”

 

The department said the relationship between Numsa, Sacca and the business rescue practitioners had broken down.

It said some participants of the leadership consultative forum had several times “wilfully breached” the conditions of the compact by leaking confidential information, issuing public statements that attacked the department, as well as attacks on its political leadership.

It said that by supporting SA Airlink’s bid to adjourn the meeting with creditors, Numsa, Sacca and the pilots’ association had contradicted the letter and spirit of the leadership compact.

Saapa, however, said it did not support the Airlink motion, but tabled their own motion before that one.

It said the business rescue plan that was tabled did not comply with the Companies Act and so would have undoubtedly led to a legal challenge and interdict if passed, which would have used up more time and resources than the adjournment, something that SAA, the department of public enterprises and labour could not afford.  — BusinessLIVE

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