Mthembu, who briefed the media on Cabinet’s meeting outcomes last week, said the airline would receive an additional R2 billion in financial assistance from government for restructuring. This was to prevent the total collapse of the airline, which could have had a tragic impact on passengers and other partners in the aviation sector.
The R2 billion will contribute towards the radical restructuring of the airline, while existing SAA lenders will provide an additional R2 billion.
The financial assistance would possibly restore the airlines’ reputation, he said.
Welcoming the decision to place the airline under business rescue, Mthembu said the appointment of business rescue practitioner Les Matuson from Matuson Associates was more than welcome as it would re-position SAA to become a stronger, competitive entity, which would gain the confidence of investors as well as passengers.
The airline was placed under business rescue in December following a national strike by the National Union of Metal Workers of South Africa alongside the SA Cabin Crew Association, which almost crippled the airline financially.
Mthembu expressed confidence in the rescue option and said equity partners in the business rescue would be announced soon.
Last month around 3,000 SAA employees protested over wages as well as planned job cuts. Flights were cancelled, with the airline losing millions daily during the week-long protest. The workers were eventually granted a 5.9% raise under strict terms.