A South African Labor Court has ruled that South African Airways must continue to operate, handing a victory to union who sued to halt the carrier’s shutdown.
South African Airways entered business rescue in December. Business rescue, by its very name, suggests rescue, not dissolution. But after stalled progress with union, mounting debt, COVID-19, and the refusal of the South African government to authorize even one rand of additional funding, South African Airways was declared dead.
Over the preceding days, unions have been in consultation with South African Airways over exit packages and how employees might be selected for a re-launched flag carrier. Concurrently, unions sued, arguing that the job cuts were an illegal way to circumvent hard-fought negotiations for equitable pay.
Agreeing with unions, Judge Andre van Niekerk held that South African must keep SAA’s nearly 5,000 workers employed.
“In the absence of a business rescue plan, the issuing of notices commencing a consultation process over proposed retrenchments is procedurally unfair.”
Specifically, van Niekerk said the primary issue was §136(1)b of the South Africa’s Companies Act, which allows for a state-owned enterprise to “retrench” (lay off) employees “only as part of a business rescue plan and on presentation of that plan or whether a retrenchment process may be initiated in the absence of a business rescue plan.”
Up to now, South African Airways has only floated the idea of a new airline, but presented no blueprint of how to establish one or how it will avoid many of the pitfalls that have made South African Airways unprofitable since 2011.
South African now says it will continue to operate cargo and repatriation in May “and beyond” and plans to “honour all existing commitments”.
CONCLUSION
South African Airways was supposed to have been liquidated by now. As I suggested nearly three weeks ago, don’t count on it…and I was correct. This latest court victory for unions may not buy much time, but it means that South African Airways continues…at least for now.
> Read More: South Africa Wants To Create A “Viable” New Flag Carrier
I need your advice.
I had flights booked on airlink using chase points but it was on a SAA ticket.
Airlink just separated from SAA and SAA is about to go out of business I thought.
I was able to get chase to give me a travel voucher for the price of the tickets but I have to use it on SAA in the next two years.
What is the likelyhood they won’t survive at all and I’ll get a different type of credit, hopefully a check for the points spent.
I don’t think they will survive, but if they do you should go back to Chase and have them make this right. It’s a very good thing, IMO, that you booked this via Chase and not directly with SAA.
If they do survive chase has told me I have two years to use the travel credit from date of purchase. But they made two important and frustrating guidelines that I have to follow.
1 I can only depart the airport my original ticket was booked from (JNB)
2. It can only be on SAA which is obvious but that gets frustrating when the flights I booked were to Skukuza via Airlink which is no longer partnered with SAA.
So basically I’ll have this travel credit for SAA If they survive but the airline/route I want to rebook with will no longer be in network.
They are 100% wrong on point #1. That is just not the case. As for #2, they are also wrong. The ticket must be issued on SAA, but can be on any partner, including Airlink. Bottom line: the Chase travel people are far worse than the AMEX folks, who themselves are bad.
Will, I’m afraid you’re out of luck. Maybe you should try to escalate to a supervisor or ask for a goodwill and get your points back.
Even if SAA resumes scheduled operations (which I doubt) these will be severely scaled back (might be down to operating 2 domestic routes only: JNB-CPT and JNB-DUR). Plus as you noted Airlink will not be doing business with SAA anymore. That’s the biggest problem for you as most of useful for tourists routes within ZA are operated by Airlink. You won’t be able to use your voucher for Airlink routes as those don’t have SAA flight numbers anymore (only 4Z).
So even if SAA somehow survives you’ll have hard time finding a meaningful use of your voucher.
I’m in a similar boat, and I, too, request the advice of our host. I booked a flight to JNB in SAA business class for early *this* year, got the United miles refunded, then booked it for *next* year when the schedule opened up. So… should I wait until SAA officially liquidates? Or get the miles back now ($100 refund fee) and try to find another way to get there with those miles (plus another 8000–one way, the return is *another* debacle).
I would not cancel now. Wait and see if they survive. Only change if you find another routing, like Lufthansa or Ethiopian.
SAA will continue with repatriation and cargo flights for now.
Until they land at an airport where money is owed to the authorities, and those shiny jets are impounded.
FYI third paragraph typo: consolation – > consultation. I kinda doubt the unions have been providing comfort to the airline during a time of loss… in fact your post says the exact opposite, lol 😉
I wish the US court systems would base rulings based on fairness but that’s not the American way (no pun intended).
I think we agree on most issues, but perhaps not on this. I am certainly glad we use precedent and textualism in the USA rather than subjective, and sometimes arbitrary and capricious, notions of fairness. The U.S. system is far from perfect, but I appreciate its aspirations.
I think I see your point. Where do you draw the line between a fair contract and one that all parties knowing signed? A slippery slope.