For the aviation fans

[SwissVan]

SAA BR Article from Daily Maverick

 

 

The future of SAA is now out of government’s hands and firmly in those of the private sector, for better or for worse.

 

It was inevitable, but it still came as a shock — the meddlesome Department of Public Enterprises stood back long enough to allow the SAA board to apply for voluntary business rescue, a process that was completed on Thursday 5 December 2019.

The board has appointed Les Matuson of Matuson Associates as the business rescue practitioner in South African Airways’ voluntary business rescue process. 

This puts to bed the vexed question of just who is in charge at SAA. The acting CEO, executive chair, board and shareholder minister all defer to the BR practitioner.

Within 10 working days, a meeting must be held where creditors prove their claims against the airline. This provides a very clear idea of the liabilities.

 

Within six weeks, the Matuson must present a turnaround plan to creditors, though he could apply for a slight extension.

This plan must be approved by 75% of creditors and 50% of the company’s independent creditors, which excludes the shareholder.

This gives creditors, presumably the private sector, enormous power over the future of SAA.

If the plan involves a change in shareholding, once approved by creditors it must be approved by the shareholder.

But even here the state’s power to intervene is limited. The alternative is liquidation.

“This is a smart move,” says Neill Hobbs, a director of corporate restructuring firm Hobbs Sinclair. “It depoliticises the entire process and puts SAA in the hands of a team that will exercise their mind independently and with the viability of the firm in mind.”

The ability to dodge bureaucracy and move fast — whether to cancel suspicious, inefficient or expensive contracts, cut staff or sell assets — is what will give SAA its best hope of recovery.

The process will lead to one of two outcomes, says PJ Veldhuizen, a partner with Gillan & Veldhuizen.

“Either the company will be restructured to the point that it becomes a going concern, or it will be liquidated. In the latter eventuality, it will happen in an orderly fashion with creditors receiving more on their rand than in the case of a disorderly liquidation.”

It is worth noting that government pencilled in a commitment during the Medium Term Budget Policy process in October 2019 to repay SAA’s existing R9.2-billion in debt, and provide it with R2-billion in operating capital, a fact that was reiterated in the late-night government statements on the business rescue process.

This means that creditors will not take as severe a haircut as would normally be the case such instances.

Whether SAA lives or dies, it seems certain that a sale of assets will occur.

The board, working with the Department of Public Enterprises, had already been working on its “radical restructure” with the sale of Air Chefs and SAA Technical on the table.

Mango, which is a going concern, was to be ring-fenced, giving rise to interesting possibilities for the orange airline.

It seems likely the BR practitioner will at least glance at the options explored by the board in the past few months.

While the BR practitioner is empowered to work with the board and management, SAA has a big management team and it is likely that this will be pared down.

“Management tends to behave strangely once a BR practitioner is appointed,” Hobbs says. “It could be that they have a vested interest, an agenda or an interest in covering up failures. It’s easier to work without all but the most essential people. It also leaves the employees, who know what is going on, free to speak.”

SAA is already engaging with trade unions on the retrenchment of 900 staff. While these discussions had been deferred to the 31 January 2020, they could be accelerated.

It is also possible that the practitioners, who are unlikely to have airline expertise, will employ a specialist adviser or consultant. Someone like former CEO of Comair Erik Venter could be considered.

The decision to apply for voluntary business rescue was eventually the last choice standing.

The other option was liquidation, the consequences of which would be dire: 9,000 staff would have to line up with other creditors for their share of the rand; small businesses that depend on SAA would possibly fold and all current and future obligations would come due.

It is difficult to put a figure to this, but it is most certainly well north of the R40-billion that has been bandied about.

The radical restructuring was the other option, but the time for this action had run out.

Once local and international insurers withdrew their insolvency cover on SAA tickets, sales fell off a cliff, drying up cash flow.

Funders were not prepared to come to the party and the snowball was gathering speed.

Forcing the board’s hand further was trade union Solidarity, which had applied to the courts for SAA to be placed in business rescue.

The difference between a court-ordered rescue process and a voluntary process is profound.

In the case of a court-ordered process, the court — not the SAA board — chooses the business rescue practitioner.

Also, a judge will only sanction business rescue if there is a reasonable prospect of the business surviving. Considering SAA is insolvent, the judge could have ordered the company be liquidated instead.

This is where the post-commencement finance — R2-billion from National Treasury and another R2-billion in loan guarantees — was essential as it keeps the ship afloat during the business rescue process.

 

SAA’s board may have averted a major disaster, but the airline’s future is far from certain.

 

https://www.dailymaverick.co.za/article/2019-12-05-saas-fate-lies-in-hands-of-corporate-sa/?utm_medium=email&utm_campaign=Business%20Maverick%20Friday%206%20December%202019%2010x&utm_content=Business%20Maverick%20Friday%206%20December%202019%2010x+CID_44bce345cbb5b37ae637941159c2a5e8&utm_source=TouchBasePro&utm_term=SAA%20what%20happens%20now

[Robbie Stewart]

1574325586638.png

 

me (Galileo) Galileo.

me (Galileo) Galileo,

Galileo figaro

Magnifico-o-o-o-o.

[Long Wheel Base]

The last one has arrived!!!!!! Anyone notice whats wrong? Will give you a hint, all 4 have the same snag!!!!!

[SwissVan]

The last one has arrived!!!!!! Anyone notice whats wrong? Will give you a hint, all 4 have the same snag!!!!!

Capture.PNG IMG_20191209_083929.jpg

SOUTH AFRICAN should be above the windows?

[Quagga]

The last one has arrived!!!!!! Anyone notice whats wrong? Will give you a hint, all 4 have the same snag!!!!!

Capture.PNGIMG_20191209_083929.jpg

They all have the same reg number zs-sdf

Edited December 9, 2019 by Quagga

[Long Wheel Base]

SOUTH AFRICAN should be above the windows?

We have a winner!!!!!!!!!!! Check some pics here of how it should be.

[Long Wheel Base]

They all have the same reg number zs-sdf

LOL that would have been a serious fail(or some sort of illegal registration process). Luckily the paint issue won't be noticed by many. BUT it is still wrong and who ever painted them either got the measurements all wrong or whoever sent them the details got it wrong. 

[Bonus]

The last one has arrived!!!!!! Anyone notice whats wrong? Will give you a hint, all 4 have the same snag!!!!!

Capture.PNGIMG_20191209_083929.jpg

 

What's the story with the plane in the background? The one that is minus the engines.

[Long Wheel Base]

What's the story with the plane in the background? The one that is minus the engines.

ZS-SLA A340-200 that is ancient. In fact it was the first A340-200 to come out of Airbus. We had 6 of them and when they got retired we kept this one for cabin crew training. It has no engines and scrap wheels, brakes, landing gear etc but inside it is kitted out 100% servicable. All the ife, safety equipment etc works. Our cabin crew do a lot of training on that thing. We have even had the police come and do terrorism training on it. They fire blanks at each other the whole works. First time it happened, most of us were not aware of this training procedure and heard all the gun fire and thought we were under attack.

[The Ouzo]

ZS-SLA A340-200 that is ancient. In fact it was the first A340-200 to come out of Airbus. We had 6 of them and when they got retired we kept this one for cabin crew training. It has no engines and scrap wheels, brakes, landing gear etc but inside it is kitted out 100% servicable. All the ife, safety equipment etc works. Our cabin crew do a lot of training on that thing. We have even had the police come and do terrorism training on it. They fire blanks at each other the whole works. First time it happened, most of us were not aware of this training procedure and heard all the gun fire and thought we were under attack.

surely if the wings are taken off it would occupy less space, or are the wings needs for certain training exercises? 

[SwissVan]

surely if the wings are taken off it would occupy less space, or are the wings needs for certain training exercises?

The serviceable / repairable / scrap store does not have a shelf big enough for those wings.....

 

Sorri *** joke

Edited December 9, 2019 by SwissVan

[The Ouzo]

The serviceable / repairable / scrap store does not have a shelf big enough for those wings.....

 

Sorri *** joke

its Kempton, lean them up against one of the perimeter walls and they'll be gone in 13 seconds.

[Bateleur1]

its Kempton, lean them up against one of the perimeter walls and they'll be gone in 13 seconds.

 

And about 30 minutes later there will be a "plakkers huisie" in Alex with a rather impressive "afdakkie"

[SwissVan]

Out of interest sakes @LWB

 

How easy does the wing come off those beasts?

I’ve seen wing removals on much smaller aircraft that were a major exercise because they were not actually meant to be removed

[Long Wheel Base]

surely if the wings are taken off it would occupy less space, or are the wings needs for certain training exercises? 

That is/was unused space so didn't really need to save space. The landing gear also attaches to the wing so it would then need some sort of structure to keep it up. The wings are needed for training exercises as well, there are 4(?I think on that model) over wing exits. The time the cops did an exercise that I saw, they were climbing and walking on the wings.

[Long Wheel Base]

Out of interest sakes @LWB

 

How easy does the wing come off those beasts?

I’ve seen wing removals on much smaller aircraft that were a major exercise because they were not actually meant to be removed

TBH I have never seen a full wing removal myself but I have seen some pretty extensive repairs on the WtoB(Wing to Body) fairings and mounts. The wing gets basically caged in with stands and jacks, all hanger doors closed and kept closed(same as with a full landing gear retraction test), No work gets done on the rest of the aircraft. But I think you right in saying the wing isn't designed to be removed completely while the aircraft is in service. It is possible, just a big mission.