SAA strike caused 'sudden deterioration', urgent intervention imminent - Public Enterprises

Recent shocks to South Africa Airways’ operations rocked the finances of the national carrier to the point where the company can no longer continue to operate "as is", the Department of Public Enterprises has said.

In a statement issued on Wednesday afternoon, the department said the strike at SAA, and the cancellation of bookings that followed, resulted in a sudden deterioration of SAA’s financial position.

Urgent intervention 

"Accordingly, the Department of Public Enterprises is working together with SAA to urgently formulate immediate actions that will be required to provide support to enable SAA to carry on its business.

"However, SAA cannot continue as is," the statement said.

The statement said government efforts, under minister Pravin Gordhan, are focused on ensuring that the airline is stabilised, governance and leadership issues are addressed and the airline returns to a stronger financial footing in the medium to longer term. 

"None of this can be achieved without the necessary contributions by all the key role players in the airline. The actions being undertaken by the Minister include involving relevant stakeholders so that they can participate in the support initiative," the statement said.

SAA skipped a scheduled meeting with Parliament’s Standing Committee on Public Accounts on Wednesday evening, intended to brief the committee about when and how the national carrier plans to table its annual report and financial statements.

The beleaguered parastatal has already told Parliament that it is technically insolvent, with questions regarding its ability to continue on as a going concern. The airline has also failed to table its financial statements in Parliament for the last two financial years.

The Scopa statement said SAA indicated that it was not available for the meeting. It added that Scopa would be paying SAA a visit early in December instead. 

In a statement released on Wednesday, SAA said it got permission from Scopa chair Mkhuleko Hlengwa to have their appearance deferred.

"Given the significant and ongoing developments in respect of the sustainability of the airline, SAA welcomes the deferment of their appearance at Scopa. This will enable further urgent engagement with all relevant role players on the support initiatives being developed under the direction of the shareholder," the statement said.

The statement said information requested by Scopa had been received and refuted any suggestion that it did not cooperate fully with Parliament.