south african airways into business rescue phillip saunders
The logo of South African Airways (SAA) is seen on an aircraft at O.R. Tambo International Airport in Johannesburg, South Africa, February 14, 2019. Picture taken February 14, 2019. REUTERS/Mike Hutchings/File Photo

An interim CEO of South African Airways has been appointed, after an overwhelming majority of creditors voted to support the business rescue plan of the airline and avoid liquidation.

The Department of Public Enterprises made the announcement today, and named Phillip Saunders, now SAA chief financial officer, as the interim CEO. The BRP still needs an injection of more than R10 billion, either in private or public funding, to survive.

The fate of the airline, and whether it would be liquidated, hung in the balance until the meeting today. Almost 90 percent of creditors voted for the BRP, which includes a voluntary severance package for 2,700 staff and keeping only 1,000, according to the Department of Public Enterprise, which welcomed the creditors’ approval of the BRP. The vote also included unions.

“The DPE believes that the favourable vote is a much better outcome for creditors and SAA employees than liquidation, and the government remains confident that the implementation of the business rescue plan will balance the rights and interests of all parties,” it said.

Saunders was described as “an experienced airline executive with a strong commercial background, and he will work closely with the interim board to appoint an interim management team that must implement a fundamental restructuring of SAA led by the new interim board.

“The department hopes that a new SAA can reclaim market share while fighting to compete more in the emerging market space – notwithstanding the impact of the COVID-19 pandemic that will constrain the aviation industry for some time into the future.”