Business rescue practitioners shut down SAA’s plans to fly again

South African Airways’ business rescue practitioners (BRPs) say that the airline’s announcement that it plans to resume domestic flights under lockdown level 3 was “unvetted”.

In a statement published on Tuesday, SAA said that it plans to retain its domestic schedule of flights between Johannesburg and Cape Town with effect from mid-June 2020.

Accordingly, the group said it is focusing on ensuring operational readiness to resume flights once permissible.

However, the group’s administrators say that this is not the case, and that the communication from the airline was sent out in violation of the BRPs’ communications protocol “which was put in place so that unvetted releases are not issued”.

“The position around the cessation of flights remains as is until SAA has a better sense of what the level 3 lock down means in terms of domestic air travel,” the administrators said.

SAA was forced to stop all flights in March, after the country moved into a strict lockdown which forced people to stay at home. The airline was allowed to fly at select times, to bring South Africans home from overseas.

The BRPs are currently wrestling with the government over the future of SAA: the Department of Public Enterprises wants the business to be salvaged and restructured into a new airline, while the administrators believe the only options are to wind the business down, or to liquidate.

The parties have agreed to work together – and not sell any assets – until a business rescue plan is formulated.

“The airline needs to consider what the opening of the skies will mean from a commercial and load factor perspective. SAA’s future funding also remains a key variable in all of the above considerations,” the BRPs said.

“It is unfortunate that the unvetted press statement created an unfair expectation on our relevant stakeholders, including SAA’s customers as well as employees, who are on unpaid absence as a result of the travel ban which led to the halting of the company’s operations and compounded its financial distress.”

The administrators said that their focus is currently on the publication of the business rescue plan.