There may be a glimmer of hope for SA Express employees as Business Day reported today (March 27) that the troubled airline was expected to be among the first organisations to apply to the UIF Temporary Employee Relief Scheme (TERS) to be able to cover its salaries for March.
Will this be enough to save SA Express and continue its business rescue process? The business rescue practitioners Phahlani Mkhombo and Daniel Terblanche, don’t seem to think so, highlighting in a letter sent to employees late last week that, without additional state funding, the business rescue plan would not succeed.
SA Express shut down flights from March 18 “until further notice” amid the outbreak of the COVID-19 pandemic, further adding to the airline’s economic woes.
“We have [therefore] come to the conclusion that, a reasonable prospect to rescue the Company no longer exists, and consequently, we will begin a process to convert the current business rescue proceedings of the Company into liquidation... with immediate effect,” the letter to employees read.
The Democratic Alliance (DA) Shadow Minister for Public Enterprises, Ghaleb Cachalia, has welcomed the recommendation by the BRPs that SA Express be liquidated.
“This is long overdue. Despite successive government bailouts amounting to R1.5 billion received by SA Express over the past two years, the airline is insolvent as its current liabilities exceed its current assets by R374 million during its 2019 financial year,” he said.
Tourism Update contacted SA Express, which in turn deferred to the business rescue practitioners. To date, neither Terblanche nor Mkhombo have responded to queries.