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Will SAA Backtrack On Promise To Refund Passengers?

Travel industry experts are concerned that government may be double-backing on its promise to refund passengers for unused SAA tickets.

“SAA is not communicating with the trade, which is frustrating and distressing as we cannot provide our customers with any certainty that their money will be returned to them,” said Sure Travel CEO Vanya Lessing.

This comes after the latest SAA Scopa meeting only allocated R2.2 billion of government’s R10.5billion bailout to unflown ticket liability (UTL) – down from the R3 billion previously approved for SAA’s business rescue plan. 
At the time of writing, there was no clear accounting for the R800 million discrepancy, which some in the industry have interpreted as an indication that passengers may not be paid out.

Speaking to Travel News Weekly (TNW), CEO of the Association of South African Travel Agents (Asata), Otto de Vries, noted with concern rumours that both government and SAA may be backtracking on its commitment that cash refunds would be given to passengers unable to use SAA tickets. “At this point, confidence in SAA is at an all-time low and a lot of clients want their money back. Surely if a fundamental part of the business rescue plan has been changed this must be approved by the Creditors’ Committee?” questioned de Vries.

Independent business rescue practitioner and aviation economist, Dr Joachim Vermooten, also voiced his concern over the irregularity to TNW: “The numbers do not add up. Those presented to parliament for the allocation of the R10,5bn in funding differ from those in the approved business rescue plan. It is clear that the amounts agreed to be paid to creditors have been adjusted, including the funding allocated for UTL, which is supposed to be paid in full. Surely such a deviation from the approved plan should require that a revised business rescue plan is drawn up and presented to the stakeholders for their approval.” 

Thousands of frustrated passengers are left waiting for news from SAA

Meanwhile, Lessing said travel agents across the country are taking the brunt of passenger anger over the slow pace of SAA refunds: “Our travel agents have their hands tied. While they are doing their best to assist affected clients – at no cost – there is simply nothing they can do if government and SAA keep shifting the goalposts.”

Revamped SAA Launch Also Delayed?

Passengers hoping to cash-in tickets when SAA resumes operations are also likely to be disappointed. While government initially said the plan was to relaunch SAA in April 2021, the chances of the ailing national carrier taking to the skies any time soon are fast diminishing.

The hold up of the launch of a smaller, more sustainable SAA is due to several ongoing issues; chiefly disputes between government and SAA’s business rescuers and a series of labour disputes. 

SAA aircraft remain grounded at airports countrywide

The labour dispute led by three of the major unions representing SAA workers is a major obstacle to relaunch. While some workers had accepted retrenchment packages, the National Union of Metalworkers of South Africa, South African Cabin Crew Association and South African Airways Pilots’ Association have rejected settlement offers. Funds to relaunch SAA cannot proceed until agreements are reached over outstanding payments, including severance packages due to employees. 

“Sadly, with things becoming increasingly more complex in SAA’s business rescue plan, together with the unpredictable environment the pandemic has caused, I think it will be a long time before SAA can move from intention to action,” said Lessing. 

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