Public Enterprises Ministry on “new” SAA

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The drama around SA Airways (SAA), the country’s embattled national carrier, is apparently not going to finish with recommendations of government appoint business rescue practitioners.

According to Public Enterprises Minister Pravin Gordan extraordinary times call for extraordinary measures.

“The challenges facing SAA required the leadership of all stakeholders to rise above the crisis created by both the weaknesses within SAA and COVID 19 and agree on a long-term vision and strategy to mitigate the impact on employees, tourism, the aviation industry more broadly and become a catalyst for economic development and job creation,” a Public Enterprises Ministry statement said.

“This requires an absolute focus on becoming internationally competitive for safety, quality and cost. It will not be the old SAA but the beginning of a new journey to a new restructured airline, which will be a proud flagship for South Africa.”

Minister Gordhan and SAA workers have “embarked on a bold and audacious process” to reach the goal.

“A Leadership Compact has been signed by all parties that commits to taking a new approach, to acknowledging there will be a major performance-based culture change for leadership, management and employees as the transition to a new airline takes place.

“In the past, the airline industry has been able to navigate through many difficult periods based on known facts relating to the market, socio-economic, financial, skills and related issues. Now within months we have seen a virtual global collapse of the airline industry. Who would have foreseen giants of the industry such as Boeing, British Airways and Virgin struggling to survive and retrenching thousands. We are faced with the unknown post the COVID-19 pandemic and there is no precedent or certainty which can be followed in developing a new strategy. The parties will be pioneers in writing a new book.

“Moving forward and looking to the future, the Minister established demanding timelines for the development of the business rescue plan and parameters to determine what path the old SAA could follow. The transition to the new airline may require sacrifices, pain and hardship for all concerned, particularly employees who may be displaced. The Leadership Forum recognise they have a responsibility to mitigate these challenges through measures including but not limited to, preferential re-employment, reskilling and enterprise development opportunities.

“Unions and the Department (of Public Enterprises)  are working on a business model that deals with what a new national carrier of the future will be and crucially how this can be achieved to ensure a competitive edge in safety, quality and costs in the sectors where SAA competes.

“The agreed intention is to produce an airline which is a catalyst for investment, job creation in key sectors, economic growth throughout the country and is a mirror to the world reflecting the splendour and beauty of our great nation. And to do so by designing an airline funded through a variety of options such as strategic equity partners, funders and the sale of non-core assets. The parties are still of the view the state must continue to play a role.

“The creation of a new, dynamic airline with the correct corporate structure, led by skilled, competent and experienced management and staffed at competitive and benchmarked rates will allow for the new SAA to compete in the post Covid-19 world,” according to the statement which does not give any timeframes.