SOUTH AFRICAN AIRWAYS ARE ON THE VERGE OF BANKRUPTCY

The South African Airways, a state-owned carrier from South Africa, made a decision to lay off about 5,000 workers next week unless the staff and the labor union representatives agree to take a deal.  Thus, the company's management is trying to save the company, facing a threat of complete liquidation.

Back in December, a company that had not made any profit since 2011, turned to the bankruptcy protection procedure adopted in the country, trying to avoid a collapse.  However, by April 2020, the business was facing a threat of complete liquidation. The government of the South African state refused to urgently help and allocate $ 531 million to the company. The carrier was informed that the money will go to combat the COVID-19 pandemic.

As a result, “rescue specialists” (BRPs, as the managers and consultants, applying for the protection from bankruptcy and trying to reorganize and restructure the business, returning it to a more stable state are called in South Africa) offered to provide a severance pay to all the employees.

The professional associations, which applied to the court to oppose the decision, do not agree with the massive layoffs.

According to the BRPs, the attempts of going to the court, if they are accepted and taken into consideration, will further aggravate the financial and organizational problems that the company has encountered.

At the same time, the government officials from the Department of the State Enterprises do not give up on the hopes of saving the SAA, despite the fact that the pandemic actually ruined the country's aviation industry.  On May 1, an official press release was posted, which approved the plans to create a new national air carrier, which should replace SAA.

Whether there will be a new “proud flagship” of the South Africa is not clear yet, but the experts predict the painful transition of the SAA employees to a new job.

Despite the fact that the state promises to take a number of measures that should mitigate the situation on the labor market by providing the preemptive right of the dismissed employees to recover or take the retraining courses, there is no certainty yet.

We should recall that previously SAA has already received about $ 1.1 billion (20 billion rand) from the state as a financial support.  Previously, the company had a fleet of 40 airliners, providing the same number of flight destinations around the world. Most of the flights have been terminated and the passengers, who bought the tickets, are waiting for a refund, since the carrier cannot issue the vouchers for the future trips, as the European and Asian competitors did.