SAA and Post Office to receive massive bailouts from govt

South African Airways (SAA) and the beleaguered South African Post Office (Sapo) are set to receive massive bailouts from government.

2023 budget speech

Finance Minister Enoch Godongwana on Wednesday afternoon said SAA will be allocated R1 billion to assist the carrier with its business rescue process, while Sapo will receive R2.4 billion.

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He made the announcement during his delivery of the 2023 budget speech in the National Assembly at the Cape Town City Hall.

Godongwana said the bailouts would come with “strict conditions”.

“The allocations for these state-owned companies will be accompanied by strict conditions to ensure sustainability, accountability and transparency. If the conditions are not met, the money will not flow.”

In April 2021, SAA exited business rescue and resumed domestic and regional operations.

Post Office retrenchments

The Sapo has been struggling with its business model and plans to retrench 6 000 of its employees, which has been widely condemned by labour unions and opposition parties.

Concerns have been raised that the retrenchments will not only have a major impact on the workers but also on the communities that depend on the Post Office to collect their grants and parcels.

The state-owned company will possibly eliminate 40% of staff salaries through a reduced work week programme and, according to its communications manager, Johan Kruger, considerations also included a voluntary severance package process.

“These measures are aimed at cutting employment costs, while saving some jobs – effectively a job-sharing model; while at the same time delaying a process of forced retrenchments,” said Kruger last month.

Additional reporting by Lunga Simelane.

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