S.Africa opposition challenges SAA rescue deal in court

South Africa’s main opposition party on Friday said it had filed an urgent court challenge against a $600 million bailout of the troubled flag carrier South African Airways.

Creditors of cash-strapped SAA approved a mass restructuring plan last week that would replace it with a new and competitive carrier.

At least 2,700 of its roughly 5,000 employees would be laid off in the process.

The Democratic Alliance (DA) party said it had “filed an urgent interdict application” at the High Court in Pretoria to “stop the bailout”.

In a statement, the DA called justification for a rescue plan “unlawful”

“Bailing out SAA is an ethically indefensible choice given the poverty and hardship so many are facing in the country” owing to the impact of the coronavirus, it said.

Finance Minister Tito Mboweni has until Sunday to file an answering affidavit.

SAA is Africa’s second-largest airline after Ethiopian Airlines.

It has a fleet of more than 50 aircraft serving domestic and international destinations.

Like most South African state-owned enterprises, it has failed to make a profit for more than a decade however, and survives on government bailouts.

After years of mismanagement and debt, the airline was placed under a state-approved rescue plan in December following a week-long wage strike that drove it to the brink of collapse.

Unions that led the protests have accepted the drawn-out restructuring plan despite what they term “shortcomings”.