By Francis Ogwo
About 17 aircraft leased out to South African Airways (SAA) by lessors have been returned after the lessors made moves towards ending the lease agreements.
This was disclosed on Friday, June 12, by authorities of the airline.
According to the sources, the returned aircraft include four A319s; three A340-300s; three A340-600s; five A330-200s and two B737s, leaving the airline with three A319s, ten A320s, one A330-200, five A330-300s and four A350-900s.
An aviation analyst, Guy Leitch, was of the view that it will be beneficial to the lessors to retrieve their aircraft under their watch than the rescue process of SAA.
In his words: “It looks like SAA is struggling to match their expected new fleet requirement with their existing fleet.
“The A320s, which the airline is still holding on to, will likely be superfluous going forward, because it is expected that domestic and regional operations will be left for for its subsidiary Mango, which operates a Boeing fleet,” Leitch added.
There was a deal signed at the the Cape Town Convention, which held in 2006. The objective of the deal was to provide financing of assets and leasing of aviation equipments.
Under the deal also, the creditor’s risk is minimal but with a higher involvement of legal watch and supervision, especially when the debtor defaults or goes bankrupt.
Despite South Africa’s position as first to endorse the treaty, it never paid much attention to its details.
Reports say the business rescue team has made plans to publish their rescue plan on Monday.
The fortunes of SAA had in recent times, nose-dived, leading about R30 billion bailout towards reviving it. This led to its placement under business rescue plan.
Subsequenty, around April, the business rescue team made an outcry that the DPE had made a denial of a request to fund the business rescue by R7.7 billion.
The contract stipulates that for a business rescue plan to be accepted, it must gain 75% approval of the votes at a creditors meeting with about 50% of the voting interest coming from a neutral position.
At the meeting, a rejected plan can be reviewed at a second meeting but with a liquidation of the company to follow at a third rejection.
It would be recalled that South African Airways has been under serious financial distress as recently the staff protesting non-payment of their salaries.
The majority of the national carrier’s estimated that 4,708 employees pilots, support staff and cabin crew have not been paid for May, barring those who have been operating repatriation and cargo flights in and out of the country.
According to reports, thousands of South African Airways (SAA) workers will be informed on Monday on the future of the distressed airline, when its business rescue practitioners (BRPs) publish the long-awaited rescue plan.
