SAA in Business rescue

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HJK 414
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Re: SAA in Business rescue

Unread post by HJK 414 » Sat May 01, 2021 9:51 am

Burner wrote:
Fri Apr 30, 2021 4:37 pm
https://citizen.co.za/business/2481359/ ... ut-of-date

....................

“The pronouncements of the imminence of a strategic equity partner are simply fiction which is a clear deflection of the fact that SAA 2.0 will simply remain a burden on the taxpayer,” says Lees.

Pickings may be slim, if at all. And with the business rescue practitioner’s admission that it has not adjusted its figures for the pandemic, the process may push the shareholder into a corner in its search for cash.

In 2020 it was already mooted that pension funds, via the Public Investment Corporation (PIC) be used to bail out Eskom. In 2017 Gigaba hinted at a similar outcome for SAA. noting that a minority equity partner may not necessarily be sourced from the private sector.

The DPE’s Richard Mantu noted that the “process to appoint a strategic equity partner is at an advanced stage and once that process is finalised, the government will make an announcement”.

Don’t hold your breath.


Read with interest - and amazed at the fact that the BRP's failed to adjust their outlook with changing market conditions .....

The most relevant part may be the fact that a "strategic equity partner" or simply an "equity partner" is nowhere to be found and the hunt for cash is slowly focussing on the biggest piggy bank in South Africa. The pension funds ......

Already having been "convinced" that having the PIC invest in ESKOM - and this being such a "great investment portfolio" to keep the future of old age income of South Africans safe ......... #-o .........- I suspect they are going to do it all over again - and re-start "SAA v2" (or "new V1" with now only geniuses at the helm ....) and use the pension funds to revive their wet dream.

If that happens - you will see the pensions (for which the state is guarantor !) - be squandered and the result will be there in the near future - as it was in just about every country north of the Limpopo - where all pension funds evaporated into thin air (or Dubai bank accounts - which seems to be the acronym for thin air in Africa).


JK
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Re: SAA in Business rescue

Unread post by Volo » Sat May 01, 2021 2:15 pm

Just how is SAA being allowed to go back to Operational status with unresolved issues with the Pilot union and Locked out pilots ?
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Re: SAA in Business rescue

Unread post by danie.e » Sat May 01, 2021 3:44 pm

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Re: SAA in Business rescue

Unread post by evanb » Mon May 03, 2021 10:29 am

HJK 414 wrote:
Sat May 01, 2021 9:51 am
Read with interest - and amazed at the fact that the BRP's failed to adjust their outlook with changing market conditions .....
I know it's not what people want to hear, but this is not what the business rescue process is all about. It's simply about a plan that satisfies the creditors, i.e. getting something that the creditors will accept that leave them in a better position than they would in liquidation.

It's quite different to Chapter 11 in the US which forces much larger concessions out of creditors and unions since the court will impose an outcome if one isn't reached.
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Re: SAA in Business rescue

Unread post by skyhigh2 » Mon May 03, 2021 1:47 pm

Evan I do not fully agree with you. The whole point of business rescue is to do exactly that. Rescue the business. The only way the creditors come out better than in a liquidation is the fact that the business is successfully rescued,and carries on at a going concern and creditors get paid going forward at new agreed terms etc. If they can not prove that the business will become solvent and be able to pay the creditors the agreed amounts then they must liquidate and everyone gets whatever is left after a liquidating company sells up everything and pays preferred creditors first etc etc.
Quick simplistic example of how it should be.

Bob is owed R10
Bill owed R20
Practitioners come into business. Decide retrenchment are needed, find new suppliers, better deals,restructure and streamline business, improve processes and say ok this should make the business survive. They then go to bob and bill and say look if we close down you both going to get R1. But if you approve this plan will will be able to pay you 50cents yearly for 10 years you will get R5 plus we save all the peoples jobs..are you happy? Yes awesome let's do it..No ok well here is the R1 all the best goodbye
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Re: SAA in Business rescue

Unread post by kosmonooit » Mon May 03, 2021 3:18 pm

Volo wrote:
Sat May 01, 2021 2:15 pm
Just how is SAA being allowed to go back to Operational status with unresolved issues with the Pilot union and Locked out pilots ?
They have a hot shot new CEO with a track record of creative and resourceful problem solving and business management/leadership, and with an intimate knowledge of the industry who is sure to get things back on track with no further ado.

Firstly there will be a skills and performance audit of all tiers of management.

Second, a divorce with the DPE

Thirdly, an organisation wide policy of the right person for the job.

etc

...

Oh sorry I was dreaming again.
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Re: SAA in Business rescue

Unread post by SandPiper » Mon May 03, 2021 4:54 pm

kosmonooit wrote:
Mon May 03, 2021 3:18 pm
Volo wrote:
Sat May 01, 2021 2:15 pm
Just how is SAA being allowed to go back to Operational status with unresolved issues with the Pilot union and Locked out pilots ?
They have a hot shot new CEO with a track record of creative and resourceful problem solving and business management/leadership, and with an intimate knowledge of the industry who is sure to get things back on track with no further ado.

Firstly there will be a skills and performance audit of all tiers of management.

Second, a divorce with the DPE

Thirdly, an organisation wide policy of the right person for the job.

etc

...

Oh sorry I was dreaming again.
Laugh my a88 off!! :lol: :lol:
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Re: SAA in Business rescue

Unread post by evanb » Wed May 05, 2021 8:01 am

skyhigh2 wrote:
Mon May 03, 2021 1:47 pm
Evan I do not fully agree with you. The whole point of business rescue is to do exactly that. Rescue the business. The only way the creditors come out better than in a liquidation is the fact that the business is successfully rescued,and carries on at a going concern and creditors get paid going forward at new agreed terms etc. If they can not prove that the business will become solvent and be able to pay the creditors the agreed amounts then they must liquidate and everyone gets whatever is left after a liquidating company sells up everything and pays preferred creditors first etc etc.
Quick simplistic example of how it should be.

Bob is owed R10
Bill owed R20
Practitioners come into business. Decide retrenchment are needed, find new suppliers, better deals,restructure and streamline business, improve processes and say ok this should make the business survive. They then go to bob and bill and say look if we close down you both going to get R1. But if you approve this plan will will be able to pay you 50cents yearly for 10 years you will get R5 plus we save all the peoples jobs..are you happy? Yes awesome let's do it..No ok well here is the R1 all the best goodbye
I think you're describing what you (and many others, myself included) feel the process ought to be rather that what the business rescue process actually does in South Africa (as per the law). It requires the practitioners to devise a plan that is acceptable by 75% of the creditors’ voting interests and at least 50% of the independent creditors’ voting interests. Once a plan is agree to, they are to then implement that plan.

They are essentially working in the best interests of the creditors, not of the business, or the sustainability of the business. The problem is that what would be in the best interests of the business's continuity and sustainability would require creditors to take much bigger haircuts than they can avoid under the South African process. In the US, where the process gives the business much more power, creditors take bigger haircuts, and businesses certainly exit with better prospects.
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Re: SAA in Business rescue

Unread post by HJK 414 » Wed May 05, 2021 8:50 am

evanb wrote:
Wed May 05, 2021 8:01 am

I think you're describing what you (and many others, myself included) feel the process ought to be rather that what the business rescue process actually does in South Africa (as per the law). It requires the practitioners to devise a plan that is acceptable by 75% of the creditors’ voting interests and at least 50% of the independent creditors’ voting interests. Once a plan is agree to, they are to then implement that plan.

They are essentially working in the best interests of the creditors, not of the business, or the sustainability of the business. The problem is that what would be in the best interests of the business's continuity and sustainability would require creditors to take much bigger haircuts than they can avoid under the South African process. In the US, where the process gives the business much more power, creditors take bigger haircuts, and businesses certainly exit with better prospects.

Correct,

Albeit that if you project this case into the USA - Taking into account the dependency on Tax payer funding (Debtor stated reluctance to finance further) and the complete absence of any realistic perspective for the business - South African Airways would probably have been pushed into Chapter 7 (Liquidation bankruptcy) rather than Chapter 11 .....

That (Chapter 7) would have opened the door for a re-start from a green-field perspective ......(Ethiopian or one of the ME players ?)
But that train has left the station in my view.

JK
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Re: SAA in Business rescue

Unread post by Volo » Wed May 05, 2021 10:38 am

The board of the new V2 must be relying on and hoping the South African flying public are so brain dead as to not care or know that their support of V2 is quite simply morally wrong . If they were relying on the likes of myself they would be dead in the water .
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Re: SAA in Business rescue

Unread post by Falafel » Wed May 05, 2021 11:15 am

Volo wrote:
Wed May 05, 2021 10:38 am
The board of the new V2 must be relying on and hoping the South African flying public are so brain dead as to not care or know that their support of V2 is quite simply morally wrong . If they were relying on the likes of myself they would be dead in the water .
Hmmm so I suppose anyone who goes to work for them is morally wrong also.... afraid that's not going to hold. People have short term memories and cost, convenience will win apart from the fact that they will be an employer in a tough market... same old, people will still fly them, and others will still steal from them... round we go :!: :!: :!: :!:
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Re: SAA in Business rescue

Unread post by Flaps Up1 » Wed May 05, 2021 11:37 am

I disagree. This time there is a serious push to not fly SAA. Add to that the airline has never ever been the cheapest. The majority of those that would fly business class or full service airlines are now very much anti SAA and anything else connected with this rogue government. Combined with very public mistreatment of the pilots and somebody very very valid safety concerns for this V2 false airline and there is a definite change in the attitude towards SAA.Several travel agents have also said they will not support this new SAA. The public have stood firm against E Tolls, I believe they will do the same against SAA. Time will tell.

And yes, anyone who goes to work for them is morally wrong in my view.
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Re: SAA in Business rescue

Unread post by cage » Wed May 05, 2021 11:54 am

I think all you okes are just terrified they make a successful go at it.
It would ruin your favourite moan of the day and leave you wondering what to do with all the time :wink:

There is absolutely nothing anyone here can do about it, nor affect any outcome.
Most of us have not used them for ages and that will continue, because they were overpriced and offered little in terms of service or modern amenities.
The BRP has not changed the culture in any way, nor the stakeholders, so it will continue to be the shitshow it always has been.

In my view all that has happened is the goal posts and starting line has shifted, meanwhile so has the market.
It is a matter of time until the cash has been burned and the hole dug deeper again.
The SOE hamsterwheel is highly predictable.

Hopefully at least some of the poor staff get a reliable paycheck.
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Re: SAA in Business rescue

Unread post by Falafel » Wed May 05, 2021 12:26 pm

Flaps Up1 wrote:
Wed May 05, 2021 11:37 am
And yes, anyone who goes to work for them is morally wrong in my view.
Ok so this deserves a :lol: :lol: :lol: :lol: :lol: :lol: :lol:

Saying people who go and work for V2 are morally wrong, yet V1 was different to a possible V2 how :?: :?: :?: :?: :?: :?:

You'd be surprised at what Government owns and what you are using (consuming)...
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Re: SAA in Business rescue

Unread post by Volo » Wed May 05, 2021 2:09 pm

Falafel wrote:
Wed May 05, 2021 12:26 pm
Flaps Up1 wrote:
Wed May 05, 2021 11:37 am
And yes, anyone who goes to work for them is morally wrong in my view.
Ok so this deserves a :lol: :lol: :lol: :lol: :lol: :lol: :lol:

Saying people who go and work for V2 are morally wrong, yet V1 was different to a possible V2 how :?: :?: :?: :?: :?: :?:

You'd be surprised at what Government owns and what you are using (consuming)...
.........................
I am not sure where your last sentence was going ? but I am not sure why you are not condemning this new V2 outright .
There is much wrong with what is happening here .

1. They are using vast amounts of public money ( yours and mine ) to support what everyone knows is not a viable enterprise and for all the wrong reasons .
2. It is clear to even a casual observer that their capital and operational capital requirement is mind numbing .
3. They can not begin to know if they still have a flying public willing to support them and if they don't get the support they need it will just end up in a new spiral .
4. They don't have pilots since they have not resolved their stand -off with the pilot union or their locked out pilots or their striking pilots .
5. They cant be trusted to treat their staff fairly going forward when they have demonstrated how little they cared for them in the past .
6.And then on top of all of this they invoke their racially biased rights in law to give the pilots that should have been given fair treatment in terms of normal labour law the middle finger .
7. They renege on established labour agreements with their pilots .
8. They have given their creditors the middle finger and as a result are unlikely to get willing suppliers going forward which in turn will result in even more operational capital being required .
9. Their subsidiaries are not guaranteed to survive without further capital injections .
10. They will compete unfairly with tax paying opposition airlines as they do not have make a return on capital or even an operating profit for their shareholder which is probably a contravention of the Competition act .
11. They are able to use the courts at will to achieve their political and ideological objectives because they have a bottomless pit of money to do this . We all know you challenge the state in court at your peril.
12. Last and not least they have no political price to pay for their unjust and immoral actions because you and I and they know that they have nothing to fear on the political front .

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