SAA and business analysts have assured its staff that they have saved enough cash to honour January’s salary obligations. South Africa’s national airline is currently struggling to keep its head above water.
In the latest example of the national carrier’s financial problems, South African Airways (SAA) have had to issue assurances to its staff that they will be able to pay staff salaries this month.
SAA have assured its staff and unions that they have saved enough money to honour their salary obligations for this month. Business rescue specialists Les Matuson and Siviwe Dongwana said in a statement:
“The business rescue practitioners and management have taken various actions to ensure that cash is conserved. As a result, we have sufficient funds to pay January salaries.”
Business rescue analysts called in
This news will come as some relief to the airline’s staff, but clearly SAA are in dire straits with no sign of the situation easing in the near future.
SAA appointed business rescue practitioners to help balance the books and keep the business afloat. It’s unclear how the ailing airline will benefit from business rescue as it comes to terms with years of mismanagement.
Earlier this week, the ANC backed plans to rehabilitate the airline but called on a probe into historical contracts.
SAA’s most recent hiccups
ANC secretary-general Ace Magashule felt that “historical contracts impacting negatively on SAA, including the lease of planes and evergreen contracts”, need to be investigated.
In addition, he said that the “government’s oversized structure should be streamlined and respond more rapidly and rigorously to challenges”.
SAA management has taken to cancelling certain flights in an attempt to reduce costs and manage cash flow. It would seem now that these cancellations were at least in part aimed at preserving their cash reserves for wages.
In addition to the cancellation of flights this week, SAA have suspended a number of local and international flights in a bid to save money.
It seems clear that in addition to business rescue, SAA operations are in need of a drastic overhaul if the carrier is to ever return to profitability.
The national carrier was promised R4 billion in funding from the government and various lenders in aid of its rescue efforts. Only R2 billion has been received, which has resulted in the SAA’s current financial crisis.
SAA’s reliance on cash injections should be of great concern as the economy continues to feel the effects of load shedding and the continuing bail-outs of state-owned enterprises.
Government officials remain locked in meetings to try and find a solution to SAA’s funding shortfall that is workable given the existing budget deficit.
In other news – So sweet! Ben 10 Vusi blesses his bae, Zodwa Wabantu with Red roses (Watch)
Vusi and Zodwa Wabantu are truly cute #couplegoals. Love is kept burning through such kind of doings, like spoiling your partner, etc.
Zodwa Wabantu and Vusi are not turning back on what they feel about each other and they are not shy at all to show off their glowing love. Recently, Zodwa receives a good and romantic treat from her Ben 10, Vusi Buthelezi. continue reading
Source: The South African