Minimums! South African Airways Update

Strike #1

In yet further trouble at South African Airways, the National Union of Metalworkers and SA Cabin Crew Association-claiming to represent more than 3000 workers at the airline-said on Monday that they would begin ‘the mother of all strikes’ at 4am on Friday 15^th November. Cabin crew, check-in and technical staff would be involved. The union has rejected the management offer of a 5.9% across-the-board increase and are demanding an 8% increase.

In response to the impending strike, the interim Chief Financial Officer Deon Fredericks has said that any industrial action could ‘spell the end of SAA and the loss of employment for all its workers and workers in downstream activities dependent on the airline.’ Industrial action could also result in commercial banks becoming even more reluctant to lend money to SAA.

Image; Gianluigi Guercia

Restructuring

Also on Monday, the airline announced it would be beginning a restructuring exercise which may lead to 944 job losses out of the of the 5146 positions at the airline itself but excluding subsidiaries Air Chefs, SAA Technical and low-cost carrier Mango.

Strike #2?

The Chair of SAA Pilots’ Association Grant Back said on Tuesday that the airlines’ almost 600 pilots are frustrated with the lack of skills and accountable leadership. In the last eight months the complement of pilots has been reduced by 122 or 18%. This has resulted in a 10% cost-to-company saving of pilots’ salaries. The union has not dismissed the possibility of its own strike.

Technically Insolvent

On Wednesday, the acting Chair reported to the government Standing Committee on Public Accounts that it was unable to submit its 2018/19 annual report and financial statements. SAA is technically insolvent and requires R2bn (~$134m) by the 20^th November and as matters stand isn’t a ‘going concern’.

Last Friday Sir Richard Branson said that Virgin Atlantic would consider buying a stake in SAA ‘if we were approached by the South African government.’ It’s likely though that this prospect would provoke further industrial action by the unions and make a financial commitment less likely; a Catch-22 scenario.

Three strikes and you’re out?