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,...