The Big SAA Rescue Mission

Expect fewer planes, fewer routes, and staff cuts in the new rescue plan to save the national carrier

- Gezzy S Sibisi

You cannot be serious! That was the exasperated response of many people when news broke that taxpayers would – yet again – be expected to cough up even more billions to keep the national airline South African Airways alive. Why doesn’t SAA just cut its losses?

Why is the government so hellbent on keeping alive an entity that had all but crashed and burned? How much more money must be poured into something that’s been destroyed by debt, corruption, and mismanagement? These are the questions that raged when a new plan to save SAA was recently approved.

We unpack the plan – and go in search of answers to those burning questions.

THE PLAN

Earlier this month the company released a 110-page blueprint outlining how it intends to become self-sufficient.

While many analysts believe the national carrier is beyond saving, the controversial plan was approved by an overwhelming majority at a recent meeting of creditors. The main points of the plan, which was drawn up by business rescue practitioners Les Matuson and Siviwe Dongwana, include:

R10 billion in emergency funding For decades SAA has been a black hole that sucks up cash. Since 1994, the state-owned enterprise has received an estimated R57 billion in bailouts – and now it’s asking for R10 billion more.

In February, the treasury warned that no more financial help would be forthcoming but in an unexpected about-turn, the government recently indicated it will help raise the “emergency funding” detailed in the plan to help SAA settle its outstanding debts, pay staff retrenchment packages and fund the restart of its operations as lockdown restrictions are lifted.