South African Airways layoff deadline suspended pending court ruling

The deadline for South African Airways (SAA) staff to agree layoff terms has been suspended while a judge considers his ruling in a court case brought by two trade unions at the cash-strapped airline.

State-owned SAA has been fighting for its survival since entering a form of bankruptcy protection in December, with its fortunes deteriorating further when the COVID-19 pandemic forced it to halt all commercial passenger flights and the government refused to provide further funding for turnaround efforts.

The administrators seeking to rescue SAA had said on Sunday that unions must agree severance terms by May 8 or a layoff agreement would be offered to all staff. Staff would then have until the end of May 11 to accept severence terms or the airline could start laying off its roughly 5,000 employees.

Efforts by the National Union of Metalworkers of South Africa (NUMSA) and South African Cabin Crew Association (SACCA) to block the job cuts through the Labour Court were opposed in court by the administrators on Thursday and the judge said he would deliver a judgment as soon as practicable.

“In according the appropriate respect to the court and to ensure that our decisions are appropriate, we have decided to suspend the time lines as communicated in our letter and communication dated 3 May 2020, until the court’s ruling has been handed down,” the administrators said in an email sent to SAA staff late on Thursday and seen by Reuters.

The administrators have until the end of the month to draft a business rescue plan for SAA, which has not made a profit since 2011 and has received bailouts worth more than 20 billion rand ($1.1 billion) over the past three years.

Public Enterprises Minister Pravin Gordhan on Wednesday said that the government wanted to avoid a liquidation or fire sale of SAA assets, preferring to see SAA restructured into a new airline.

SAA on Friday said that it will continue to operate repatriation and cargo flights “during the month of May and beyond”.