THE travel trade needs to
commend SAA for having
the courage to downsize
its workforce in the face
of massive trade union
opposition, and must offer an
embattled SAA more support,
because without restructuring,
SAA will be doomed and
taxpayers will continue to fund
the airline’s ongoing losses.
That’s the call from XL Travel
ceo, Marco Ciochetti, in
response to SAA’s announced
plans to retrench almost a
fifth of its employees (944
of 5 146) as it restructures
in line with its latest
‘Accelerated Long Term
Turnaround Strategy’. The
restructuring encompasses all
SAA divisions, but excludes
subsidiaries SAAT, Mango
Airlines and Air Chefs.
The trade unions reacted
with all guns blazing,
threatening “the mother
of all strikes at SAA at all
its operations nationally”.
The National Union of
Metalworkers of SA and the
SA Cabin Crew Association
called for the SAA board to
step down, threatening to
strike if their demand was not
met, already having secured
strike certificates and ballots
from their members.
If the strike goes ahead it
will impact the trade, says
Marco. “I really feel for SAA.
The company is losing money
and needs to be restructured.
SAA has at least 50% more
employees per aircraft when
compared to full-service
airlines in the US, Europe and
Asia. The unions are holding
SAA to ransom by threatening
strike action, which will do
more damage. Would it not
be better to restructure and
retrench 20% of staff versus
SAA closing down and 100%
of employees remaining
jobless?”
If every single staff union
member goes ahead with
plans for industrial action,
SAA could very well shut
down.
This was stressed by SAA’s
interim cfo, Deon Frederick,
in a Q&A session following a
last-minute media briefing by
the airline at its headquarters
in Johannesburg on Tuesday,
November 12.
He said the airline had a
full contingency plan in place
should strikes go ahead. “But,
if it happens, it will place our
company in significant risk.
It may even lead to closure
of the company because
ultimately suppliers will
look at this and say, should
I continue to promote this
service?”
“We’re trying to be more
competitive in the market.
We have to start by putting
people in the right positions
for growth. We’re looking at
expanding, with cco, Philip
Saunders, who is here looking
at the potential for new
routes,” Deon said.
Martin Kemp, acting HR
head for SAA, said the
airline could stand to gain
approximately R700m from
the retrenchment of 900
employees.
TNW asked if there would be
an impact on fares as a result
of cost-cutting measures and
Deon responded that the
airline was addressing “high
fare rates” and was actively
trying to lower fares as part of
the restructuring.
“We are at the stage now
where if it doesn’t keep
the aircraft in the air and it
isn’t a pass for regulatory
compliance, we don’t want to
incur it at SAA,” he said.
When asked if SAA was
in talks to sell some of its
equity, he confirmed that
the airline was in the final
stages of selling non-core
assets. He said SAA tested
the private investment waters
but there wasn’t any interest.
“SAA needs to stabilise the
company first before major
partners are interested.”
