JOHANNESBURG — South African Airways (SAA) has received a further R5 billion (US$346 million) from the Department of Public Enterprises to help make severance payments to laid-off staff as part of its rescue plan, administrators of the plan said yesterday.
SAA entered a local form of bankruptcy protection in December 2019 after roughly a decade of financial losses, with its fortunes worsening after the COVID-19 pandemic grounded flights.
The government committed to providing 10.5 billion rand to bailout the airline in October’s mid-term budget.
The business rescue practitioners (BRP) hired to restructure the airline said they had received R7,8 billion from the government including the latest payment.
The administrators, who have proposed a plan which includes reducing the airline’s staff by around two-thirds, said the money allowed them to pay cabin crew and ground staff that had accepted voluntary severance packages in August.
More than 3 000 SAA employees have accepted severance packages, while 1,300 are still in negotiations, the administrators said.
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“The payment (to staff) follows the receipt of a further tranche of R5 billion from the Department of Public Enterprises on February 12, which has further allowed the BRPs to confirm the second payment on 19 February
- Reuters