A SA Express jet on Cape Town International Airport’s runway.
Gallo Images/Grant Duncan-Smith
The National Union of Metalworkers of South Africa and the South African Cabin Crew Association claim to have an investor from the United Arab Emirates potentially interested in buying a stake in SA Express.
The regional state-owned airline is currently in provisional liquidation after a business rescue attempt failed. The court date was set for June 9 for any party to come and show why the airline should not be placed in final liquidation. However, due to the possibility of a potential investor, the matter has been postponed until 9 September.
In terms of South African law foreign ownership in domestic airlines is limited to 25%.
“We believe that SA Express is a viable airline that can be saved, and every effort must be made to find alternatives. We approached the [former] business rescue practitioners and the Department of Public Enterprises to engage and explore the possibility of an investor purchasing a stake in the airline,” Numsa and Sacca said in a statement on Tuesday.
The unions did not say who the potential UAE investor is.
They say they remain committed to trying to save both SA Express and flag-carrier South African Airways, which is in business rescue, as well as saving jobs.
The contracts of SA Express employees have been suspended in terms of the Insolvency Act.
“We understand the frustration of employees at SA Express who have not had an income since the end of February and have been protesting out of frustration. This is why we are doing everything possible to find alternatives to liquidation, because we know it would worsen the situation for workers and their families.”
Also on Tuesday, Parliament’s Standing Committee on Public Accounts was unimpressed that SA Express provisional liquidator, Aviwe Ndyamara of the Tshwane Trust Company, was not available for a scheduled meeting to brief them on the state of affairs at the airline.
The committee voted in favour of obtaining parliamentary legal advice regarding the option of using subpoenas to compel the provisional liquidator to brief Parliament if need be.
“We understand the frustration of employees at SA Express who have not had an income since the end of February and have been protesting out of frustration.”
The National Union of Metalworkers of South Africa and the South African Cabin Crew Association
Committee members said it is important for them to know what the road map is for SA Express, where the problems that lead to its provisional liquidation originated from, and what is causing the delay in paying employees their salaries. The committee also wants to know how much the former business rescue practitioners and the liquidator have been paid.
A representative of the DPE gave the committee the undertaking that he will ensure the provisional liquidator attends the next briefing.
In March, SA Express, like other airlines, had to stop operations due to travel bans imposed for the national lockdown in SA.
It was placed in provisional liquidation on 29 April 2020 after its joint business rescue practitioners filed an urgent court application in this regard in the South Gauteng High Court.
This followed after a failed business rescue attempt, brought by a service provider in March. The state has provided more than R1.2 billion in urgent financial support to SA Express for the 2019/20 financial year, including R300 million released last October.
Before the airline was placed under business rescue, government mandated the board and management to investigate and terminate a number of irregular contracts as a way to save money and root out corruption, according to the department.
The business rescue practitioners and the Department of Public Enterprises could, however, not agree on a business rescue plan and funding. The practitioners claimed government deliberately withheld financial support to the tune of R350 million. The DPE, on the other hand, felt the proposed business rescue plan did not set out a credible business case to allow further funding.
If SA Express goes into final liquidation, all its assets would have to be sold and outstanding debts collected so that affected parties can be paid in order of preference in terms of the act.
The DPE said it notes the extension of the court date and will continue to work with all the stakeholders. The provisional liquidator said he had no comment at this stage.
