South African Airways on Brink of Collapse; Lays Off All 4,700 Workers Due to COVID-19 Impact

South African Airways (SAA) is providing severance packages to its whole workforce of round 5,000 staff, a proposal by the airline’s directors confirmed after the federal government stated it would not present extra funds for rescue efforts.

The proposal, which was put to commerce unions this week and hasn’t been agreed with them, is the newest signal that state-owned SAA is getting ready to collapse. Talks with unions will resume on Monday.

SAA entered a type of chapter safety in December, since when it has needed to droop all industrial passenger flights as a result of international coronavirus pandemic.

This week the federal government advised directors that it would not present extra funds, lending ensures or permit international financing of a enterprise rescue plan.

According to the proposal, seen by Reuters, staff would see their employment terminated by mutual settlement on April 30. They can be entitled to 1 week’s pay for yearly of service, one month’s pay in lieu of discover pay and pay for excellent annual go away.

The proposal stated it appeared “unlikely that the company will be successfully rescued as a result of the business rescue process”.

“In order to make payment of the severance packages … the company is required to sell and dispose of its assets,” it added.

An SAA spokesman declined to remark. Two unions confirmed the proposal had been made and stated they’d talk about it with their members.

The Department of Public Enterprises, which oversees the airline, stated no agreements have been concluded about potential mass retrenchments as talks with collectors and unions proceed.

“There are discussion with the unions on alternatives to the current SAA business model, the success of the business rescue process and the best possible outcome for the airline’s employees,” the division stated in an announcement.

SAA has not been worthwhile since 2011 and has acquired greater than 20 billion rands ($1.1 billion) in bailouts previously three years, offering a drain on public sources at a time of weak financial development.

The talks with unions had been initially about job cuts, however one union concerned stated that they had developed right into a dialogue about winding down the airline.

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