The Department of Public Enterprises (DPE) has called on the stakeholders in financially-embattled State-owned airline South African Airways (SAA) to vote in favour of the proposed business rescue plan for the carrier. The main stakeholders are the creditors of, and the unions representing workers at, SAA. The airline is under business rescue and the vote will take place on Tuesday (July 14).

The vote on the business rescue plan was originally scheduled for two weeks ago, but the stakeholders decided to postpone it. Since then, the business rescue plan has been revised. The DPE has argued that if this revised business rescue plan is rejected, SAA could be liquidated.

“By approving the business rescue plan, creditors and employees will become the co-creators of a new national airline at a time when the devastating consequences of the Covid-19 [pandemic] are causing thousands of job losses in the global aviation industry,” argued the DPE in its statement, issued on Monday. “This is the only realistic path through which creditors and employees will derive optimum benefit, either for outstanding debts due, or for severance packages that will become available to retrenched employees.”

A yes vote, the department further argued, would be the best way to create a new competitive and viable airline that was sustainable. A no vote, or a vote to delay the process again, would, the DPE further argued, endanger the settling of outstanding debts to creditors, the granting of severance packages to retrenched workers, and the retention of 1 000 jobs in a relaunched airline.

The restructuring of SAA that would follow the approval of the business rescue plan would permit various stakeholders, including the unions, with great knowledge of the airline industry, to help create the new airline. There would also be the opportunity to later re-employ retrenched workers or for them to create their own enterprises supplying services to the relaunched carrier.

“Cabinet has expressed its support for the concerted effort to mobilise funding from various sources to finance the business rescue plan, including from potential equity partners for the uptake of the new airline,” assured the DPE. “Government is committed to support a competitive, viable and sustainable national airline and wishes to engage constructively towards the national interest objective of such an airline in a constrained fiscal environment, taking into account the impact of [the] Covid-19 pandemic on this situation.”