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SAFA, troubled SAA headed for divorce

October 9, 2020 3:54 pm by: Category: Featured, Football, SPORTS Leave a comment A+ / A-
South African Airways

South African Airways

by MTHULISI SIBANDA
JOHANNESBURG – THE relationship between the South African Football Association (SAFA) and the embattled South African Airways (SAA) is on the rocks amid the upheavals that have clipped the national carrier’s wings.

There is even a possibility of this ending up in the courts over an apparent breach of contract by SAA.

The two parties entered into a five-year deal in 2016, which would culminate in the carrier being the official airline for Bafana Bafana, the senior men’s national team.

It was to run until 2021 but the financial challenges that have left SAA unable to operate commercial flights have thrown this arrangement into disarray.

“Whilst we have a valid sponsorship contract with SAA until March 2021, unfortunately we can’t realise any value from it now because they are not operating,” Gronie Hluyo, SAFA Chief Financial Officer, said in an interview with CAJ News Africa.

“SAA was providing us with hugely discounted flights, so since they are not flying we can’t get any flights/ benefits from this relationship.”

Asked by CAJ News Africa what options his organisation (SAFA) had, he responded, “We have an option to file for breach of contract against SAA but we don’t believe that it’s the best option since they are under business rescue and they don’t have money.”

SAA’s financial troubles are well documented.

It requires a further R10 billion to fulfil its business rescue plan, with plans to resume operations at the beginning of 2021. This is part of at least R26.7 million required in total.

It was placed under business rescue at the end of 2019.

Then, there were hopes the government would bail it out but the administration of President Cyril Ramaphosa is searing under strain of an economic crunch worsened by the outbreak of the coronavirus (COVID-19).

In addition, SAA is only one of several cash-strapped state-owned enterprises (SOEs) clamouring for government’s attention.

“So we are watching the developments there with the hope of salvaging something before the expiry of our contract- 31 March 2021,” Hluyo said.

While the partnership was not finance-based, SAFA received an annual allocation of what is known as Travel Rands for Bafana Bafana. These are the flight tickets discounts. Thus, the football association can claim for loss of Travel Rands/discounts from SAA’s business rescue practitioner.

Hluyo is doubtful these claims would be prioritised.

“SAA is battling to pay retrenchments packages and in my view that will be the business rescue practitioner’s priorities” he said.

Tlali Tlali, the SAA head of Media Relations, concurred SAA’s obligations did not entail any capital outlay but founded on a non-cash basis and primarily on the provision of flights.

“The outbreak of COVID-19 has made it impossible for both parties to discharge certain obligations as per the agreement,” Tlali said.

“As matters stand, SAA is not operating any commercial flights until there is a response to its funding requirements from the shareholder.”

He advocated for dialogue.

“We (SAA) are willing to meet with SAFA and consider options available to all parties,” Tlali told CAJ News Africa.

In contrast to the strain around the SAA partnership, SAFA has retained long-term partner, South African Breweries through its Castle Lager brand.

French firm, Le Coq Sportif is the new kit supplier after the deal with Nike lapsed.

– CAJ News

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