SAA revises schedule as business rescue gets underway with added R2bn lifeline

2019-12-05 07:46 - Selene Brophy
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As the peak December holiday period gets underway, embattled national carrier South African Airways (SAA) has been placed under business rescue. 

Minister of public enterprises Pravin Gordhan confirmed SAA will be placed under immediate business rescue, with SAA issuing a statement on Wednesday saying it was the "unanimous conclusion to its considerable financial challenges".

LATEST: SAA placed in business rescue from today

So if you're a passenger meant to fly with SAA over the next couple of weeks, what does this mean for you?

SAA will operate on a new provisional timetable - the details of which will be publish shortly, says SAA spokesperson Tlali Tlali.

"Services operated by SAA’s subsidiary airline, Mango, will continue as usual and as scheduled."

Fin24 reports that R2bn will be given to SAA in "a fiscally neutral manner", to keep the airline operational - with Gordhan saying this is "not a bailout" and that SAA’s reliance of government finances must be reduced as soon as possible. 

"This is the provision of financial assistance in order to facilitate a radical restructure of the airline." 

READ: SAA in business rescue: What it means and its odds for survival

Placing SAA into business rescue is expected to "create a better return for the company’s creditors and shareholders, than would result from any other available solution", says Tlali.

During the process of business rescue it will be looking to "minimize the destruction of value across its subsidiaries and provide the best prospects for selected activities within the group to continue operating successfully."

Tlali says the airline will also be engaging staff directly as this decision now presents "many challenges and uncertainties for its staff".

The airline suffered considerable losses after a week-long strike was launched in response to its plans for restructuring as a means to stem its ongoing financial issues.

READ: Pilot writes emotional letter, sharing what it's like working at SAA 

"The company greatly appreciates the continued support of both its customers and partners in the travel industry around the world. The Board of Directors will also announce the appointment of business practitioners in the near future."

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