- South African Airways could resume domestic and regional flights in May.
- But its business rescue practitioners first need to settle outstanding debts and a bitter dispute with almost 400 pilots.
- The flag carrier’s recent inability to fetch Covid-19 vaccines in Brussels has further exposed a problem with pilot training and civil aviation compliance standards.
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South African Airways (SAA) has indicated that domestic and regional flights will be suspended until 30 April 2021, with the potential for operations to resume in May. Before take-off, the embattled flag carrier, which has remained grounded for a year amid a costly business rescue process, will need to secure equity partners, pilots, and a plane maintenance schedule.
After years of financial strain, SAA officially entered business rescue, as a last resort to avoid outright liquidation, in December 2019. With the airline’s cash reserves all but depleted and operations crippled by protracted wage disputes, the Covid-19 pandemic officially grounded SAA’s commercial flights for the rest of 2020.
During that time, SAA’s creditors voted in favour of the business rescue plan, with government footing a R10.5 billion bailout bill. And while the department of public enterprises has defended its exorbitant lifeline, claiming that the national carrier is “a valuable public asset” which cannot be allowed to fail, a series of critical hurdles still stands in the way.
A recent update published by SAA addresses the resumption of international travel amid the global vaccine rollout.
“Trans-national commercial air travel is however conditional as many countries battle with fluctuating rates of infection and/or new waves of infection,” noted SAA.
“For now this has necessitated that all SAA operated flights – domestic and regional – are suspended until 30 April 2021 and all SAA operated international flights are suspended until 30 October 2021.”
Three equity partners have been identified as viable candidates to resuscitate SAA, which, according to Public Enterprises Minister Pravin Gordhan, could remerge as a new airline in “the next month or so”. But before that happens, the airline’s business rescue practitioners need to settle outstanding debts and conclude payment arrangements with dissatisfied labour union members.
More than 3,200 employees, who accepted voluntary severance packages, will receive their long-awaited pay-outs next week while the SAA Pilots’ Association (Saapa) battles for its members’ backpay. The ongoing impasse involves a lockout order which prevents almost 400 pilots from returning to work. The lockout order will cease when pilots cancel their current regulating agreement and accept new terms of employment, which includes new wage scales.
The department of public enterprises and business rescue practitioners argue that only 88 pilots are required to restart the airline. This represents an operating capacity one-tenth of the size of SAA’s pilot roster in 2010. Sapaa has countered with a proposal which looks to save 135 jobs.
Saapa chairperson Grant Back says that the lockout is an attempt to force pilots to accept retrenchment packages and protect the department and business rescue practitioners against an unfair dismissal claim.
SAA’s pilot problem recently re-entered the spotlight due to the halting of a plane which was meant to fetch a batch of Covid-19 vaccines in Brussels. According to Back, the South African Civil Aviation Authority (SACAA) picked up that, among other problems, the pilots listed to fly the plane to Brussels completed their latest training at a facility outside of SAA which was not properly certified.
This exposes wider issues associated with SAA’s restart. Due to the lockout, SAA is faced with a pilot training problem. Sapaa-affiliated members, who, according to Beck, have been asked to return for the purpose of training, are, in line with the law, unable to work for or with SAA.
Until this impasse is overcome, SAA is left searching for pilots to fill the void created by the lockout. At this stage, it’s unclear whether pilots affiliated with the National Transport Movement (NTM) will be enough in number and expertise to restart the airline.