SAA gets another R5 billion from government

South African Airways (SAA) has received a further R5 billion from the Department of Public Enterprises to pay for voluntary severance packages (VSPs) to staff, as part of its business rescue plan.

In a statement on Tuesday, the airline’s business rescue practitioners (BRPs) said cabin crew and ground staff employees who took the VSPs at the end of August 2020 were paid part one of their packages on Friday.

SAA has been under business rescue since December 2019 after suffering major financial losses. The government had committed to providing R10.5 billion to bail out the airline in October’s mid-term budget.

“The payment follows the receipt of a further tranche of R5 billion from the Department of Public Enterprises on 12 February, which has further allowed the BRPs to confirm the second payment on 19 February.

“Since Friday 12 February, the BRPs have received a total of R7.8 billion in funding from the Department of Public Enterprises to implement the commitments of the business rescue plan,” the BRPs said.

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The BRPs said the VSPs that were paid to staff comprised of:

• One month’s notice payment in lieu of notice.
• Payment of the full entitlement of accrued leave as at termination dates that were signed in their VSP.
• Pro-rata 13th cheque if applicable.
• A 2019 salary increase of 5.9% back pay to VSP applicants if applicable.

The BRPs said part one of the VSPs to management, specialists and pilots would be made on Wednesday.

Part two of the payments would be on Friday.

“Part-two payments shall be made for all VSP applicants for whom the BRPs have received tax directives and where employees do not have a tax number on application for the directive, an application will be made on their behalf for a tax number.

“There may be a delay in payments made in respect of part two while the BRPs await allocation of tax numbers to those employees who don’t have tax numbers.”

The VSP programme included 3246 employee acceptances across all categories and closed at the end of August 2020. This means workers who signed the VSPs effectively concluded their employment with SAA.

“Also noteworthy is that the BRPs made tranche-four payments to 164 individuals who accepted the three-month salary settlement agreement and 13th cheque payment to 53 non-VSP employees. A total of 82% of employees have been paid in terms of the settlement agreement.”

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