You might also like:
While the Minister of Public Enterprises, Pravin Gordhan, has called for a review of the SAA route changes, an economist has spoken out in defence of the business rescue plan.
“The decision to rationalise the current routes makes economic sense and will help the national carrier achieve sustainability far more quickly,” said Economist at the Efficient Group, Francois Stofberg.
He told Tourism Update that the danger of reviewing plans and making more changes would mean more uncertainty as the tourism industry and travellers couldn’t plan ahead.
“That lack of trust could affect Brand SAA and place its long-term sustainability in jeopardy,” said Stofberg.
Over the weekend, the joint business rescue practitioners (BRPs) – Les Matuson and Siviwe Dongwana, defended their decisions, despite widespread opposition to the plans by President Cyril Ramaphosa, the relevant unions, the various provincial governments, the Department of Public Enterprises and the South African Communist Party.
“The decisions were taken in the best interests of SAA. They are intended to make the airline commercially and operationally sustainable, free from the requirement of future funding from the Government post the implementation of the restructure,” commented the BRPs.
They pointed out that the actions aimed to improve SAA’s balance sheet, which is intended to create a platform for a strong and sustainable airline and so ensure that the company is more attractive for potential strategic equity partners.
The BRPs concluded: “We recognise the concerns raised, especially around the domestic routes. We will continue to engage with stakeholders, with a commitment to include inputs into the final business rescue plan, which is due to be published by the end of this month.”
Reportedly, under South African company law, the business rescue team is entitled to take decisions that are deemed necessary to turn around a distressed company, independently of government.
Source: tourismupdate.co.za