South African Airways; Running on Empty

As announced earlier in the month, union members at the state-owned South African Airways (SAA) embarked on an eight-day strike from the 15th to 22nd November. Cabin crew, check-in and technical staff belonging to the National Union of Metalworkers and SA Cabin Crew Association demanded an across-the-board increase of 8%, rejecting the 5.9% offered by management. They also rejected the announced ‘restructuring’ exercise which anticipated the loss of 900+ positions out of a total workforce of 5100.

The airline said as a direct result of the strike it would lose R52 million (~$3.5 million) daily. The unions finally accepted the 5.9% offer, retroactive to April. It was agreed this would be paid if enough funds were available.SAA wing Richard van der Spuy - Travel Radar - Aviation News

© Richard van der Spuy

The airline is insolvent, last made a profit in 2011, has not been able to publish its annual report to government, and required a R2 billion cash injection by 20th November which it has been unable to secure.

At the time of the strike, Board Member Martin Kingston warned that a consequence might be that SAA would be unable to pay salaries at the end of November. This has now come to pass; this month, employees received half of their monthly pay. The airline has said it would pay the balance early in December, together with the 13th cheque. (many employees receive 1/13 of annual salary each month and a ‘double cheque’ in November in time for Christmas)

In the meantime, intense discussions are underway today, Wednesday within the SA government if a further guarantee would be offered or whether to allow a ‘business rescue’ exercise or indeed liquidation. An announcement is expected by the end of this week.


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