South African state airlines workers’ representatives and government officials on Thursday welcomed a US$1-billion-dollar injection into two cash-strapped airlines as announced in Parliament in Cape Town.The state-owned airlines were placed on Business Rescue Plans more than a year ago in efforts to revive them from possible liquidation, and their assets disposed of through sales.
But President Cyril Ramaphosa said the South African Airways (SAA) and South African Express were symbols of national pride and liquidating them was a non-starter as witnessed during Finance Minister Tito Mboweni’s outline of his medium-term budget policy statement in Parliament.
With these presidential instructions, Mboweni secured the US$600 million for the troubled SAA and granted $8.5 million to the smaller SA Express – and with nearly US$400 million set aside for the SAA to settle its government guaranteed debt and related interest.
Public Enterprises Minister Pravin Gordhan on Thursday welcomed government’s commitment to provide the funding to breathe life into the two flyers which need restructuring to guarantee their long term survival.
“Failure to allocate the funds would have resulted in the liquidation of the airline at a cost of more than US$1.1 billion.
“Further, the liquidation would have meant that SAA employees would have been worse off and received a maximum of nearly US$2,000 per staff member, regardless of years of service, to the extent that there are funds available,” Gordhan said.
National Union of Metalworkers of South Africa’s (Numsa) spokesperson Phakamile Hlubi-Majola said the airlines’ workers were relieved at the announcement of the funding.
“As Numsa, we must say we are relieved that finally the money which SAA needs for the restructuring has finally been allocated,” Hlubi-Majola said.
He said what was important to the union was a well-planned management of the allocated funds, and that for this money to be spent properly, the current SAA board must resign from office.