Embattled SAA puts 944 jobs on the line as it embarks on restructuring drive
JOHANNESBURG – Embattled South African Airways (SAA) on Monday informed all its 5 146 employees that the state-owned airline was embarking on a restructuring process that could result in job losses.
Acting chief executive, Zuks Ramasia said the airline had commenced a consultation process with all employees in line with section 189 of the Labour Relations Act. The act requires an employer to consult with recognised labour unions and keep abreast employees who may be affected by the restructuring process.
Although the process may lead to retrenchments, Ramasia said SAA hoped to minimise the impact while offering support to those who would be directly affected.
She said the airline had faced numerous challenges over the past few years culminating in the current grave situation.
The challenges include, funding and liquidity challenges; inability to borrow indefinitely without repaying debt; high interest costs on loans; volatile and fluctuating fuel price; currency volatility; insufficient revenue and cash generation in relation to operating cost; ageing fleet which is expensive to maintain and is fuel inefficient, making it difficult for SAA to compete in the market place; and aggressive international and regional competition for revenue stimulation and network optimisation.
“SAA’s balance sheet has historically been weak and remains so despite recent substantial capital injections from the government. Our continued losses and reliance on government guarantees to borrow money from lenders, have increased the interest costs which impacts the operating cost of the business.
“We urgently need to address ongoing lossmaking position that has subsisted over the past years. That is why we are undergoing a restructuring process that seeks to ensure effective implementation of the accelerated Long Term Turnaround Strategy amidst the present prevailing operational challenges,” she said.
Ramasia said the scope of the restructuring encompassed all SAA divisions and departments but excludes the subsidiaries such as SAAT, Mango Airlines and Air Chefs.
Ramasia said as at 1 November 2019, SAA had a total workforce of 5 149 globally. She said no final decision would be taken until the consultation process was concluded. However, it is estimated that approximately 944 employees may be affected.
Ramasia said during the consultation process, SAA would engage meaningfully with the recognised unions and affected employees on.
“These hard decisions were necessary to put SAA on a more sustainable footing while ensuring we continue to offer customers the best service. It is a matter of great regret that that we will part ways with some loyal colleagues. We are taking all possible steps to ensure these changes are managed in a caring manner and that everyone is treated with dignity,” said Ramasia.