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South African Airways to offer a severance package to 5,000 workers

South African Airways (SAA) is offering severance packages to its entire workforce of around 5,000 workers.

The decision comes amidst the government announced it wouldn't provide more funds for rescue efforts. The proposal, which was put to trade unions this week and hasn't been agreed with them, is the latest sign that state-owned SAA is on the brink of collapse. SAA entered a form of bankruptcy protection in December, since when it has had to suspend all commercial passenger flights due to the global coronavirus pandemic.

According to the proposal stated that employees would see their employment terminated by mutual agreement on April 30. They would be entitled to one week's pay for every year of service, one month's pay in lieu of notice pay and pay for outstanding annual leave.

In order to make payment of the severance packages, the company is required to sell and dispose of its assets," the proposal added.

"There are discussion with the unions on alternatives to the current SAA business model, the success of the business rescue process and the best possible outcome for the airline's employees," the department said in a statement.

 

SAA has not been profitable since 2011 and has received more than 20 BN Rand ($1.1 billion) in bailouts in the past three years, providing a drain on public resources at a time of weak economic growth.

The talks with unions were originally about job cuts, but one union involved said they had developed into a discussion about winding down the airline.

 

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