Embattled flag carrier, South African Airways has seemingly reached the final stretch of a protracted return to service. After one and a half years under business rescue and 220 Million Rand in fees to the rescue practitioners, SAA finally exited the rescue process at the end of April and was handed over as a going concern.
During the past week, the Department of Public Enterprises updated Parliament’s public enterprises committee on the status of South African Airways and projected the National Airline’s return for the third quarter of this year 2021
“When exactly do we take off? Closer to August, it would appear – although we are doing our best to fast-track the due diligence processes with the SEP and vice-versa.” – Pravin Gordhan
Strategic Equity Partner (SEP)
Headlining the carrier’s to-do list before return to service is the announcement of a strategic equity partner who will share the business risk going forward, but government remains tight lipped on the identity of the investor with the process and eventual announcement seemingly remaining a moving target. However, government is confident that this will be finalized within the next month.
“The department is in final discussion with the strategic equity partner, the parties are conducting due diligence, which is very normal in these kinds of transactions. The process may be finalised in the next four to six weeks and once the process is finalised, an announcement on who the preferred strategic partner is will be made,” said acting public enterprises director-general Melanchton Makobe, while speaking at a public enterprises portfolio committee meeting in parliament
Pilots
A dispute between pilots and SAA has been integral to issues around the airline during business rescue and a solution will be key to a smooth return to the skies. With the airline wiping out thousands from its workforce as part of the restructuring process, one of the pressing demands is that SAA must also pay all its members who are to be retrenched three months’ remuneration in lieu of notice.
Members of SAAPA the Pilots’ Association, which represents nearly 90% of the pilots at SAA, have been locked out since 18 December last year and recently moved to block the hiring of non-union replacement workers by the airline.
However, the Labour Court in Johannesburg dismissed an application by the SAA Pilots’ Association (SAAPA) for interim relief that sought to prevent the airline from engaging replacement pilots and workers during the pilot strike. SAA interim CEO, Thomas Kgokolothe celebrated the decision and remarked that it meant a green light to proceed with the relaunch of the national airline.
Subsidiaries
SAA’s subsidiaries Mango Airlines, Air Chefs and SAA technical remained afloat through the pandemic, but not without feeling the full thrust of the global aviation crisis brought about by the covid-19 pandemic. The companies have been begging for state support, however government had earmarked R10.5 Billion for SAA specifically towards its business rescue funding.
But a special appropriations bill before parliament has changed that. The bill provides for R2.7 billion of the R10.5 billion given to SAA to be split between the three subsidiaries in order to give them some much needed financial relief. The bill was tabled by Minister of Finance Tito Mboweni in February and proposes R1.663 billion for South African Airways Technical (SAAT), R819 million for Mango Airlines and R218 million for Air Chefs.
Air Operator Certificate(AOC)
SAA’s Air Operator Certificate (AOC) will expire on 30 June 2021 and its renewal is a box that will have to be ticked before the airline is allowed to fly again
The South African Civil Aviation Authority (SACAA) is conducting an audit at South African Airways for the renewal of its AOC which will ready the airline for commercial operations once again
Photo: @aviator-nic
