South Africa-Aviation-Creditors

S/Africa pleads with creditors in battle to save troubled SAA

APA-Pretoria (South Africa)

The South African government on Wednesday called on creditors to back a plan to rescue the troubled national carrier from possible bankruptcy.

Speaking ahead of Thursday’s voting exercise to approve a rescue plan for the cash-strapped South African Airlines (SAA), the Ministry of Public Enterprises said ”the approval of the business rescue plan would help creditors and employees to be co-creators of a new airline."

According to the rescue plan, the government needs to come up with a US$6 billion funding to restructure the SAA.

The money would be used to pay off creditors and 3,000 workers who are expected to be dismissed from the payroll.

The creditors are due to vote on the newly drafted restructuring plan on Thursday. However, one of the creditors – the privately owned airline South African Airlink – went to court on Wednesday in efforts to stop the vote from taking place.

The plan was published by the state-owned SAA's administrators last week following long delays due to wrangling with government and the airline’s 4,000 workers who are facing mass dismissals.

The government has been pressuring the administrators to salvage the airline in some form even though it has not made any profit since 2011 and has survived on state bailouts to keep it afloat.

The rescue plan also calls for a scaling back of the SAA fleet, a move which is already underway as most of the airline’s fleet was leased.

As expected trade unions at the airline have opposed the rescue plan due to the anticipated massive job cuts, threatening to take the airline to court to stop the dismissals.

NM/jn/APA

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