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Is it bye bye SAA? BRPs see little chance of saving the broke airline

The airline could be grounded permanently after the department of enterprises rejected a request for a R10 billion bailout earlier this month.

South African Airways plane. Picture: Facebook

JOHANNESBURG – South African Airways (SAA) business practitioners say it's unlikely that the broke airline can be saved as a result of the business rescue process.

Over 4,700 employees stand to lose their jobs; should they accept the lay-off proposal on the table by Friday.

The airline could be grounded permanently after the department of enterprises rejected a request for a R10 billion bailout earlier this month.

SAA will have to sell off most of its assets to be able to pay off creditors and settle workers' severance packages.

The business rescue practitioners proposed terminating contracts of all its workforce by the end of the month.

The offer to pay employees depends on whether there will be any money left, after the embattled airline has settled all its debt is settled.

Aviation expert Guy Leitch says this might be the final descent of the state-owned entity.

“The airline simply cannot survive without being on a drip, particularly in the time of COVID-19 and the entire airline has been grounded. So, I am afraid for as long as government wasn’t prepared to give it more money, for very solid and understandable reasons, and as long it wasn’t prepared to allow that SAA incurs more debt around the world with other banks then it was inevitable that it be closed down.”

Unions, management and government have until next week to accept or reject the business rescue practitioners’ proposal.