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‘Still unclear’ whether there will be money for salaries at SAA Technical

SAAT's technical and operational capabilities positions it well for delivery on its mandate, says the interim CEO.

SAAT’s technical and operational capabilities positions it well for delivery on its mandate, says the interim CEO.

  • Employees at SAAT are still in the dark as to whether they’ll be paid this month. 
  • SAAT only has R10 million, which will be used to pay risk contributions, unions informed their members.
  • The DPE said a commitment had been made on the allocation of funds to subsidiaries.  

The coalition unions at SAA Technical (SAAT) – the Aviation Union of Southern Africa (AUSA), Solidarity and the SA Transport and Allied Workers Union (Satawu) – informed their members on Thursday that it was still unclear whether there will be any money to pay the salaries this month.

SAAT is a subsidiary of South African Airways (SAA). Unlike SAA, its subsidiaries – SAAT, Mango and AirChefs – are not in business rescue.

“We met with the company again and it is unfortunately SAAT only has R10 million that will be used to pay risk contributions. There is, therefore, no confirmation as to what salary will be paid if any, as there is no money,” the unions informed their members.

“They have requested an urgent meeting with the board and will only be able to pay salaries if they receive money. They also said that the inevitable will happen if they do not receive the required funding.”

According to Derek Mans, Solidarity’s organiser for the aviation industry, the risk remains that – if employees are not paid – SAAT cannot expect them to tender their services.

A letter sent by Satawu to its members at SAAT refers to a meeting with the Department of Public Enterprises (DPE) in which the union was informed that the department is “working on government’s transformatory agenda, which may affect the future of the subsidiaries”.

Regarding an “adjustment bill” to obtain funding, the union told its members that the DPE said a commitment had been made on the allocation of funds to subsidiaries (R2.7 billion). The challenge that remains is finalising internal Parliamentary processes.

On Thursday, Public Enterprises Minister Pravin Gordhan told Parliament’s Standing Committee on Public Accounts (Scopa) that R2.7 billion intended for SAA’s subsidiaries was part of the R10.5 billion package provided for the airline in the mini-budget in October last year.

“While the subsidiaries are not in business rescue, the SAA group as a whole was impacted. We have been saying for some time that SAAT is also in need of restructuring to find its feet,” said Gordhan.

“SAAT is also the target of several expressions of interest by potential partners or people who want to acquire it. We will give some attention to that once money is available.”

Scopa was told that a special appropriation would have to be made by Parliament once it returns from recess in order for the R2.7 billion to be able to flow to the subsidiaries.

SAAT’s acting CEO Terrance Naidoo said on Thursday that the company remains a solvent business that carries the support of its shareholder as a strategic asset, essential for the aviation sector in SA and the African continent. 

“Its technical and operational capabilities position SAAT well for delivery on its mandate and regulatory obligations in a competitive manner. Of course, delivery on these essentials requires appropriate capital support, given the aftermath of global pandemic in aviation,” said Naidoo.

“We reiterate that SAAT is at this stage faced with financial challenges in the face of the Covid-19 impact on air travel, like many other players within the aviation sector. Amid these financial challenges, SAAT managed to procure essential spares throughout the lockdown period to enable continued maintenance, repairs and preservation of customer’s aircrafts.” 

He said in response to the immediate financial challenges facing SAAT, the interim board has given SAAT the reassurance that the DPE is doing its best to secure interim funding.

“SAAT continues to work together with its employees, customers, and service providers to manage the current challenges in a responsible manner towards securing the future of its business,” said Naidoo.

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