Solidarity suspends court action against SAA

Trade union Solidarity has suspended its plans to initiate court proceedings to have the South African Airways (SAA) placed under business rescue.

The union’s announcement follows a written undertaking from SAA chief executive Vuyani Jarana that the embattled airline will “immediately” start a process to procure a strategic partner.

“In view of the SAA’s letter in which comprehensive undertakings are given‚ Solidarity has decided to suspend its application for business rescue for the time being‚” said the union’s Dirk Hermann in Centurion‚ south of Pretoria‚ on Tuesday.

“It is difficult to immediately proceed with litigation if the other party has conceded in writing to most of our demands.”

According to Solidarity‚ Jarana confirmed in his letter that the South African government had called on the private sector to participate in SAA’s ownership and management.

“Jarana further writes that the shareholder‚ the SAA board and management agreed‚ in view of the pressure to fund SAA‚ to immediately proceed with the process.

“SAA also undertook to liaise with Solidarity in a structured way regarding the plan to find a strategic partner‚” said the union.

SAA has confirmed to Solidarity that it is desirable that further capitalisation of the airline must be done, mainly by a strategic partner‚ the extent of which has not yet been finalised‚ said Hermann.

The trade union said it will continue to act as a watchdog‚ warning that if SAA fails to honour its undertakings it will proceed with the application for business rescue.

In a letter to President Cyril Ramaphosa and ministers Nhlanhla Nene and Pravin Gordhan‚ Solidarity expressed its concerns about the national air carrier‚ claiming that its management and financial models are unsustainable and ineffective.