South African Airlines has been in a crisis state for some time now. However, what will happen to their employees?
SAA pilot’s unions have been discussing specific options surrounding a voluntary severance package. For the most part, the unions have accepted this following the governments warning that the severance offers cannot improve any more. One pilot’s union, SAAPA has not followed in the footsteps of others of accepting such offers and continues to stand their ground.
The union is facing increasing criticism from the South African government regarding their stance on the matter.
Will the airline survive?
For the carrier to survive and continue to operate, a new strategy has been discussed. This plan outlines a new staff capacity of around 1,000 vacancies to start. The program also mentions that around $129 million in severance funds will be required for the newly redundant positions.
So how will SAA restructure?
SAA will look to restructure to include integrated domestic, regional and international services. All while looking to becoming a sustainable and competitive airline once more.
A creditor vote is due on 14th July which will determine the outcome of the rescue plan.
The $129 million in funding is the best the government can offer for workers, especially as the government also faces increasing pressure to manage other financial demands in the country.
The four unions to have accepted the proposal so far include NTM, SATAWU, AUSU and Solidarity. If the rescue plan does not get put into action, the airline faces an extreme threat of liquidation.
Public Enterprises Minister Pravin Gordhan has been a vocal proponent of salvaging the loss-making airline and turning it into a sustainable business, rather than letting it be liquidated.
“It is important that we ensure that we have an airline that emerges from the business rescue plan that will not be burdened by an unsustainable agreement,” the public enterprise’s department emphasised.
What are your thoughts? Is the severance package enough? Let us know in the comments or get in touch: Hello@travelradar.aero