SAA: Minister says clear plan is needed from business rescue practitioners
Despite a clear restructuring outline being awaited, Public Enterprises Minister Pravin Gordhan this evening said non-competitiveness and uncertainty in the aviation environment, will see the national carrier no longer existing in its current form.
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The Minister of Public Enterprises, Pravin Gordhan, has come out criticising business rescue practitioners in the restructuring process of the national carrier, saying a clear plan has not been put forward.
Gordhan spoke on the progress of state-owned entities during a briefing on Wednesday evening.
The minister criticised practitioners for seemingly steaming ahead with retrenchment proposals, while a clear outline for what was planned, had not been put on the table yet.
He did, however, maintain that South African Airways will not continue in its current form.
“The old SAA as it existed will no longer continue to exist, not only because the airline was no longer competitive, but also because the aviation environment has changed. No one can anticipate what air travel will look like in months to come.”
Gordhan said there will be a slow and eventual return to domestic and international air travel.
“We predict that international travel by air will only return to what we saw before the pandemic, between 18 and 36 months, and slightly sooner for domestic travel.”
Physical distancing measures remain challenging in terms of air travel, he said. Should aircraft then carry only a 30% load, this will impact on profitability levels.
In terms of its day-to-day operations, Gordhan said business rescue practitioners are now in charge of SAA: “They are the effective bosses on a day-to-day basis as we consider the restructuring of the airline.”
He said in order to assist the airline to function beyond May, certain cost-saving measures had been implemented, among others, that trade unions that agreed on tiered salary cuts. For this, employees need to be commended, Gordhan commented.
“We have also called on business rescue practitioners and consulting role players to reduce their fees in the restructuring process by up to 40% to contribute, like SAA staff, to a proper outcome in the restructuring process.”
He said a fully-fledged business rescue plan was yet to be tabled.
In the same briefing, Eskom CEO Andre de Ruyter commented on the entity’s operations during the lockdown.
“The impact of Covid-19 saw a huge drop in the demand for electricity. We noticed clear shifts in the patterns of consumption. The morning peaks disappeared while the evening peaks were more pronounced. The night dip was also far more pronounced. This made it difficult to ensure stability in the system.”
He said after accounting for lost revenue due to the lower electricity demand, and the saving on primary energy (coal), Eskom anticipated a reduction in cash generation of R2,5 billion.
De Ruyter outlined the entity’s maintenance plans, saying 60 retired Eskom engineers have offered their services free of charge in this regard and that he viewed this as exemplary in terms of duty to the country.
De Ruyter commended citizens for adhering to previous calls to switch off power-hungry supplies during peak times. He said Eskom was looking into procuring electricity from entities that have spare capacity available.
In terms of the unbundling of the power utility, De Ruyter said good progress was made towards the three envisioned divisions, namely degeneration, transmission and distribution, which will result in a reduced and optimised cost base.
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