[News24] SAA staff are being offered extremely generous severance packages — averaging R580 000 each — at a total cost of R2.2 billion that is due to come from taxpayers’ pockets.This includes retrospective increases and incentive bonuses, but is still not enough for several unions.
The offer comes at a time when companies which did business with SAA will be lucky if they see 7.5c on every rand that the bankrupt airline owes them. The debt amounts to about R11 billion in total and creditors may have to give up any hope of ever seeing the money they are owed.
The debt, however, excludes that to banks, which is guaranteed by the state.
The acceptance of the severance packages is a prerequisite for the approval of SAA’s rescue plan, according to which the workforce of the airline will be cut from the current level of about 4 700 to 1 000.
Creditors were meant to vote on the plan on Thursday, but the it was postponed after unions and creditors said the plan was deficient. They are expected to meet again on July 14.
Although the business rescue practitioners have indicated that government is ready to finance the plan, it is still not clear where the money will come from.