South African Airways’ employees were given another week to negotiate on job losses, and if no solution is found to the stricken airline’s financial woes, they’ll be expected to sign a retrenchment agreement.
The staff of 4,800 were originally given until Sunday to accept retrenchment packages or face the consequences of the airline being liquidated — in which severance packages couldn’t be guaranteed.
Talks were held Saturday between labor unions, the Department of Public Enterprises and the administrators, known locally as business-rescue practitioners, where it was decided that no application for liquidation would be made and the retrenchment process and severance offer to employees be suspended until May 1, according to a statement by the Department of Public Enterprises.
Bloomberg earlier reported on the extension of negotiations.
The South African government placed South African Airways into a voluntary business-rescue process to try and save the cash-strapped carrier in December. Since then, the coronavirus pandemic has exacerbated the airline’s troubles and the government has refused to fund it further, given its other funding obligations to deal with the virus.
The department is considering options including strategic equity partners, said the statement, and plans are to turn the airline into a viable, sustainable and profitable asset.
“The leadership recognize the enormity of the challenge but are unequivocally committed to saving South African Airways and shining the torch to a new world post COVID-19 in which SAA is a key catalyst for investment and job creation,” said the statement.