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DA welcomes move to place SAA under business rescue

An announcement is expected soon on the appointment of business practitioners to see through the arduous process.

FILE: SAA's lenders will also provide another R2 billion as the national carrier begins the journey to restructuring its business and financial affairs from Thursday. Picture: AFP.

JOHANNESBURG - The Democratic Alliance (DA) has on Thursday reacted to South African Airways (SAA) being placed in business rescue, saying sense has finally prevailed.

The broke airline will get R2 billion from the government in post business rescue commencement funds.

SAA's lenders will also provide another R2 billion as the national carrier begins the journey to restructuring its business and financial affairs from Thursday.

An announcement is expected soon on the appointment of business practitioners to see through the arduous process.

The DA's Alf Lees serves on Parliament's public spending watchdog Scopa.

“A business rescue practitioner must now take control of the airline and take advice from all quarters, but in the end cannot take instructions from Pravin Gordhan or the department.”

Scopa has postponed a meeting with the airline's management following the move.

On Wednesday, President Cyril Ramaphosa ordered that the cash-strapped airline go into voluntary business rescue, saying that was the only viable option to save it from implosion.

It emerged on Wednesday night that Ramaphosa informed his Cabinet to change its approach in addressing the dire situation at SAA, saying restructuring the airline would not help.

In a leaked letter, seen by Eyewitness News, the director general in the Presidency and Secretary of the Cabinet, Dr Cassius Lubisi, informs Cabinet members and deputy ministers about the president's decision.

Presidency spokesperson Khusela Diko has confirmed the authenticity of the leaked correspondence.

SAA is insolvent and doesn’t have money to fund operations in future.

The airline is still trying to recover from a week-long strike, which cost it over R50 million daily. Also, it’s battled to guarantee the payment of salaries and travel group Flight Centre recently cut ties with it.

Ramaphosa said Cabinet’s approach to restructuring the airline would not work and the overall position needed to change in order to save the airline.

He said placing SAA under voluntary business rescue was the only viable route to avoid the uncontrolled implosion of the airline.