A South African labour court has thrown out an application lodged by two trade unions over planned job cuts at South African Airways (SA, Johannesburg O.R. Tambo). Earlier this month, SAA's business rescue practitioners (BRPs) announced the closure of all domestic routes with effect from March 1 save for the trunk Johannesburg O.R. Tambo-Cape Town service.

Given the impact, the move will have on the state-owned airline's staff in Port Elizabeth, Durban King Shaka, and East London, the National Union of Metalworkers of South Africa (NUMSA) and South African Cabin Crew Association (SACCA) applied for a court order because the BRPs had sought to accelerate the layoffs by disregarding a mandatory 60-day consultative period.

However, Judge Graham Moshoana said in his ruling on Friday, February 14, that the application was moot until such time that the BRPs proceeded with plans for retrenchments.

"It is this court's conclusion that SAA has not contemplated dismissal and the duty to consult within the contemplation of section 183(1) of the Labour Relations Act did not arise," he was quoted as saying by IOL Online. "Since the duty to consult has not arisen, the powers of this court to compel a fair procedure and/or interdicting and restraining SAA are severely circumscribed. For all the above reasons, the application must fail."

SAA is fighting for its life both commercially and legally as it tries to remain afloat in the hopes of streamlining its costs and eventually finding a willing investor.

Last week, Airlink (South Africa) (4Z, Johannesburg O.R. Tambo) filed its own court application against the airline demanding the immediate payment of over ZAR700 million rand (USD47 million) in unremitted ticket sales revenue. If successful, the payment could push SAA closer to the brink of liquidation. If not, Airlink will become one of SAA's biggest creditors, alongside Comair (South Africa) (MN, Johannesburg O.R. Tambo), which is owed over ZAR1 billion (USD67 million) by SAA in court-prescribed damages for years of anti-competitive practices.

Should Comair and Airlink become major creditors, they would have significant power in the approval or disapproval of the SAA's restructuring plan, which must secure creditor consent or else the airline will be liquidated. The plan is set to be published by the end of February.

Despite a potentially turbulent few weeks ahead, Flight Centre said on Friday it would resume selling SAA tickets just over four months after it ceased doing so. The travel agency was forced to suspend selling SAA tickets in November after its preferred travel insurance provider, Travel Insurance Consultants (TIC), stopped covering SAA against insolvency.

TIC reinstated the insolvency cover on Friday, Flight Centre said.

"TIC, a division of Santam Limited, said that this development is based on their confidence that the decisions taken during the business rescue process are in the best interests of stabilising SAA," a statement read.