South African Airways (SAA), which was placed into business rescue in December 2019, is now back in the hands of its own management team since business rescue practitioners Leslie Matuson and Siviwe Dongwana terminated the airline’s drawn-out rescue process by filing SAA’s Notice of Substantial Implementation with the Companies and Intellectual Property Commission (CIPC) on Friday 30 April.
SAA UNDER OWN MANAGEMENT
This brings to an end the lengthy 17-month business rescue process for the national carrier. The airline is now in the hands of its own board, with interim CEO Thomas Kgokolo at the helm.
Kgokolo, a chartered accountant with a wealth of experience as a non-executive director for various organisations, has the responsibility of getting the airline back into the skies.
A SOLVENT AND LIQUID COMPANY
When handing the airline over to its interim board, the business rescue practitioners said they were transferring a solvent and liquid company to the receivers.
In an earlier statement, the practitioners said the airline had received R7.8 billion of the R10.3 billion in funding required for the implementation of their approved business rescue plan.
“A significant portion of the debt that hamstrung SAA has since been compromised and the balance thereof transferred to the Receivership, a vehicle specifically intended to ensure the debt is paid over the next three years. Thus, the practitioners are leaving both a solvent and liquid SAA adequately set to continue into the future,” said the airline’s rescue practitioners said, as quoted in Tourism Update.
BLEAK FUTURE FOR SAA SUBSIDIARIES
Outstanding funding is hampering operations at SAA’s subsidiaries.
The future is looking increasingly bleak for Mango Airlines, Air Chefs and SAA Technical while funding allocated to SAA subsidiaries by the Department of Public Enterprises has yet to be authorised by Parliament.
EFFICIENT RESTART OF OPERATIONS
Indications are that the carrier will return to the skies in stages from the end of July. Kgokolo is upbeat about the task ahead and said that there would be a key focus on efficiencies within the business as the airline moves towards the restarting of operations.
“We need to look at routes that are profitable and sustainable and whether we are using the latest aircraft in terms of technology and fuel efficiency. We also need to make sure that the organisation structure is capacitated with the right people,” Kgokolo told the Daily Maverick.
“We will do a staggered restart by first starting with domestic and regional flights. We are looking at a period between July and August this year to get back in the air. The management that takes over from us can add on more flight capacity but this is all dependent on when the dispute with the SAA pilots is resolved,” Kgokolo said.