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SAA Business Rescue Plan Approved By 86% Of Votes At Creditors’ Meeting

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THEBE MABANGA

THE South African Airways Business Rescue Plan was approved by 86% of the votes in a virtual creditors and employees meeting held on Tuesday.

The plan required 75% of the vote to succeed.

The Department of Public Enterprises welcomed the move, reiterating its long held view that it is better than liquidation.

“The DPE believes that the favourable vote is a much better outcome for creditors and SAA employees than liquidation, and the government remains confident that the implementation of the business rescue plan will balance the rights and interests of all parties,” the department said in a statement.

The department said its priority now is to “give effect to funding commitments by the government for the business rescue plan” and appoint an interim board.

The department and National Treasury have to give business rescue practitioners an undertaking in writing that there is funding for the plan.

Government needs to come up with about R10 billion of the required R26 billion for the new airline to take off.

The department also announced the appointment of Phillip Saunders of the International Air Transport Association as interim CEO while an interim board will be appointed imminently.  

The South African Communist Party (SACP) welcomed the adoption of the plan, describing it as “a blow to unpatriotic elements and groupings that have relentlessly been campaigning against South Africa continuing to have its own national airline – in a global operating environment where the aviation sector plays one of the key roles in transportation, international trade and regional as well as continental integration.”

The Department’s acting Director-General Kgathatso Tlhakudi said the restructuring “is a project that is undertaken on behalf of a democratically elected government”.  

Tlhakudi pointed out that during the COVID-19 crisis, for example, South Africa has been unable to rely on foreign carriers, as they are also grappling with the pandemic, which points to the dangers of a long haul destination like South Africa not having its own carrier.

“The department hopes that a new SAA can reclaim market share while fighting to compete more in the emerging market space– notwithstanding the impact of the Covid-19 pandemic that will constrain the aviation industry for some time into the future,” the department said.

(Compiled by Inside Politics staff)

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