Funding woes go on at SAA Technical

SAA Technical, the repair and maintenance unit of SAA, is yet to receive the R1.66bn due to it from the government, leading to a stalling of its retrenchment processes and possible partial payment of employee salaries. Management and trade unions are set to meet at the negotiating table from Monday for a new round of discussions.

The repair and maintenance unit of the grounded national carrier, SAA, is yet to receive the R1.66bn due to it from the government, leading to a stalling of its retrenchment processes and possible partial payment of employee salaries.

SAA Technical (SAAT) management and trade unions are set to meet at the negotiating table from Monday for a new round of discussions regarding the stalled retrenchment process scheduled to be concluded by June 30. The company informed employees in April that its retrenchment process would see its staff complement of 2,019 employees reduced to 1,203 due to financial challenges.

SAAT along with other SAA subsidiaries, Mango Airlines and Airchefs, were allocated a combined R2.7bn by the Special Appropriations Bill which was approved by parliament in June. The R2.7bn forms part of the R10.5bn allocated to SAA in the October medium-term budget policy statement.

The public enterprises department told parliament that SAAT’s operations had collapsed to a point where it was unable to procure spare parts for SAA’s aircraft, which had a domino effect on the maintenance required for Mango. The repair company’s finances are so dire that its revenue, which has plunged by nearly R1bn since 2020, is insufficient to cover fixed monthly costs, parliament heard.

Though SAA has received its funds and has exited business rescue, the funds from the government have yet to flow to its subsidiaries which continue to grapple with financial challenges spurred on by the grounding of the parent company and the ongoing challenges faced by the aviation sector due to Covid-19, according to unions.

The public enterprises department did not respond to queries about this at the time of publication.

National Union of Metalworkers of SA (Numsa) spokesperson Phakamile HlubiMajola said the final meeting regarding retrenchments at SAAT was expected to take place on Wednesday. It is, however, unclear whether the funds from the government would have been transferred to the company in time for it to conclude the retrenchment process.

“Retrenchment processes must be funded. They want to cut jobs and offer voluntary severance packages but there is no money to pay packages.

“As far as we know money was allocated by Treasury to DPE [department of public enterprises] but it has still not been [transferred],” she said.

Regarding the payment of salaries for July, trade union Solidarity, a union at the company, informed its members at SAAT on Thursday after consultations with management that there had not been any “significant movement” on funding and collection of outstanding monies [from customers]. “A meeting will be convened should there be any significant movement around the funding towards the 25% payment of salaries for July 2021,” the notice reads.

SAAT spokesperson Vimla Maistry confirmed that the company was collecting outstanding payments from its customers.

“As soon as this process is finalised, SAAT will be in a better position to advise on the payment of salaries,” she said.

The department earmarked R819m from the Special Appropriations Bill to Mango whose financial challenges were laid bare in April when its flights were temporarily suspended after it failed to make payments towards its debt to the stateowned Airports Company SA.

In a last-ditch effort to save the airline, the SA Cabin Crew Association approached the department to place the cashstrapped airline in business rescue before a liquidation application by a creditor is heard by the court in August.

AS SOON AS THIS PROCESS IS FINALISED, SAAT WILL BE IN A BETTER POSITION TO ADVISE ON THE PAYMENT OF SALARIES