News / South Africa

Ilse de Lange
2 minute read
11 Jul 2018
6:17 am

Solidarity puts SAA legal action on hold

Ilse de Lange

SAA's written undertakings to find a strategic partner are 'sufficient' and Solidarity has decided to give the CEO the benefit of the doubt.

Trade union Solidarity has put its threatened legal action to have the ailing South African Airways (SAA) put under forced business rescue on hold, after SAA CEO Vuyana Jarana gave a written undertaking to initiate an urgent process to procure a strategic partner.

The undertaking came after Solidarity earlier this year announced plans to embark on a process to have SAA placed under business rescue.

Solidarity’s chief executive Dirk Hermann said this position was in stark contrast with SAA’s previous stance that the airline first needed to be turned around before a strategic partner could be procured.

“In view of SAA’s letter in which comprehensive undertakings are given, Solidarity has decided to suspend its application for business rescue. It is difficult to immediately proceed with litigation if the other party has conceded to most of our demands,” he said.

The undertaking followed talks between Solidarity and SAA about the planned business rescue application.

Jarana confirmed in the letter that government was of the view that the private sector must participate in SAA’s ownership management and that the SAA board and management agreed to proceed with the process to find a strategic partner immediately in view of the pressure to fund SAA.

SAA also undertook to liaise with Solidarity in a structured way regarding the project plan to find a partner.

Hermann said SAA had also confirmed it was desirable that further capitalisation of SAA must be done mainly by a strategic partner.

Hermann said aviation experts such as Barry Parsons, Guy Leitch, Nico Bezuidenhout and Monwabisi Kalawe were part of the Solidarity team which developed an alternative turnaround strategy for SAA as part of the application.

This strategy included comparative studies with foreign airlines that found themselves in similar circumstances.

“We are not naïve – SAA’s written undertakings are sufficient to suspend the application. However, we are very sceptical about the implementation of these undertakings.

“We have confidence in Mr Jarana’s good intentions and will give him the benefit of the doubt. We have less confidence in the shareholders’ will to make radical decisions on private ownership,” Hermann said.

ALSO READ: SAA works to calm Solidarity with ‘major’ undertakings

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