SAA on life-support and will collapse due to strike
- The strike at SAA is a direct threat to the national carrier
- If the strike continues the national carrier would face liquidation as lenders demand repayment
- The company has lost R28-billion over the past 13 years
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Thandeka Mgoduso, acting chair of SAA, has said that the airline will be beyond rescue if employees continue to strike. The loss of income would mean that salaries would not be paid.
Currently, the national carrier is only operating due to goodwill on the side of lenders and if the strike continues the airline faces liquidation according to mybroadband.co.za.
“If this strike perpetuates and there is no money coming into the company, everyone that we owe will want their money and where does the money come from?” Mgoduso said.
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He said that at this point there is no talk of rescue as the airline would be beyond that point.
“There is nothing to rescue and that is why we are doing what we are doing to ensure that we return the company to a state where it can be turned around,” she said, “the employees that are on strike are the ones that are going to cause SAA to close.”
Briefly.co.za learned that the government recently warned that it will not go easy on SAA as it tackles mismanagement and corruption at the airline.
“If some tough decisions need to be made, we’ll make them,” Public Enterprises Minister Pravin Gordhan said.
Over the next three years, the government has committed to paying off the R9.2-billion debt that SAA owes.
Lenders are only prepared to extend credit if a firm repayment plan is agreed on. More than R28-billion has been lost by SAA over the past 13 years and has relied on government bailouts to stay afloat.
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Recently, Briefly.co.za, wrote about the troubles facing SAA and that jobs would be cut at the airline in a new restructuring scheme.
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Source: Briefly News
