South African Airways (SAA) will have to overcome the stigma of being put into business rescue in its efforts to take to the skies once more, Parliament has been told.
The Department of Public Enterprises (DPE) on Wednesday briefed Parliament’s select committees on appropriations and public enterprises on how R2.7 billion will be spent on the subsidiaries.
The department welcomed the announcement by SAA business rescue practitioners that the airline is no longer under business rescue.
Mango’s Benediction Zubane said that the board and interim board of SAA were in discussions with the Department of Public Enterprises about the repositioning of the subsidiaries in light of the delayed funding.
Thomas Kgokolo is joining the cash-strapped airline at a time when its business rescue process, which started in 2019, is yet to be concluded.
Pilots claimed that they had not been paid salaries for almost a year.
Crew members reportedly miscalculated the takeoff weight of the plane during departure from Johannesburg last month.
Last year, over 3,000 workers accepted voluntary severance packages as part of the airline's business rescue plan. But those who stayed with the airline said that they had not received salaries since May last year.
A plan for SAA to resume operations has not yet been agreed.
The ailing airline has been working to implement its business rescue plan.
Public Enterprises Minister Pravin Gordhan faced-off with MPs for two consecutive days this week, where he was forced to defend government’s decision to give SAA a R10.5 billion bailout.
Public Enterprises Minister Pravin Gordhan said that SAA still had a role to play in the country’s economy and allocating it R10.5 billion was a better option than liquidation.
Finance Minister Tito Mboweni warned that public finances needed to be rehabilitated as efforts went into helping the economy to recover from the COVID-19 pandemic and lockdown.
Finance Minister Tito Mboweni made the announcement while delivering his Medium-Term Budget Policy Statement in Parliament.
They said that all existing cargo and repatriation flights would be undertaken but no new ones would be accepted.
The Public Enterprises Department said that it was confident that the R10.4 billion needed for the restructured carrier would be made available to the practitioners very soon.
Public Enterprises Director-General Kgathatso Thaludi said that government had committed to providing billions of rands to restructure SAA and now needed to establish a mechanism through which to channel the funds.
The DPE said all conditions for the business plan were met and implemented, and it was now in the final stages to complete the process.
