South Africa: SAA Rescue Plan Reveals Govt's Tunnel Vision


What is the point of throwing everything at SAA when the rest of the air transport system and entire industries upon which SAA depends are collapsing?

The statement by the Department of Public Enterprises (DPE) on Monday 13 July, urging creditors to approve the proposed SAA business rescue plan, is like asking turkeys to vote for Christmas. Its fixation with SAA also ignores much bigger issues.

The proposed plan, which creditors will be asked to vote on today (Tuesday 14 July), envisages the rescued SAA turning a profit only after three years, based on what, in the current local and global environment, can only be described as extraordinarily and wildly optimistic assumptions.

This is a convenient time-frame, as the plan also says trade creditors will be paid 7.5c for each rand they are owed, over the same three years, IF money is available. If those assumptions are wrong and SAA fails to hit the rescue plan's projections, then they get nothing.

This must surely be a worry for employees as the voluntary severance benefits the DPE has promised employees will also crumble to dust.

The banks are unaffected by whatever happens to SAA. Their loans are government-backed,...

AllAfrica publishes around 800 reports a day from more than 100 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.