Fate of SAA still to be decided

The much-awaited report on the future of the South African Airways (SAA) will not be known just yet as the Department of Public Enterprises still has to hold further engagement with organised labour. Rogan Ward Reuters

The much-awaited report on the future of the South African Airways (SAA) will not be known just yet as the Department of Public Enterprises still has to hold further engagement with organised labour. Rogan Ward Reuters

Published Apr 21, 2020

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JOHANNESBURG - The much-awaited report on the future of South African Airways (SAA) will not be known just yet as the Department of Public Enterprises still has to hold further engagement with organised labour.

This comes after Public Enterprises Minister Pravin Gordhan tabled an updated report on SAA at a virtual special Cabinet meeting yesterday. 

Gordhan today met with unions representing workers of SAA to discuss their proposals to save the airline and reduce imminent job losses.

In a statement, Cabinet said further engagements with organised labour was planned this week before the Inter-Ministerial Committee could process the SAA report. 

“After appreciating the progress that has been made and other planned engagements with organised labour this week, Cabinet directed that the Inter-Ministerial Committee should meet and further process this work,” Cabinet said.

“A consolidated report that will have taken all the pending work into consideration will be resubmitted in the next Cabinet cycle.”

The National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) have flatly rejected the collective agreement from SAA business rescue practitioners for mass retrenchments at the airline.

The unions said they were mindful that SAA would not survive in its current form and that it was time for extensive deliberation on options on how the airline could be rescued. 

The airline's business practitioners have proposed the termination of SAA's entire workforce of 4 700 workers by end of April in exchange for unguaranteed severance packages after Gordhan declined their request for R10 billion funding. 

The cash-strapped national carrier has failed to post a profit since 2011 and has relied heavily on government bailouts for a number of years while failing to implement a sound turnaround strategy. 

President Cyril Ramaphosa will this evening address the nation to outline the expanded Covid-19 socio-economic measures that form part of the national response to the pandemic.

According to a statement from the department of Public Enterprises, "There was consensus that the unions would work with the government to ensure that a new financially viable and competitive airline emerges from the business rescue process; that a consultative forum be established to advance dialogue and consultation on the process ahead; that there will be a sharing of ideas on how best to ensure the wellbeing of employees at this challenging time, and that there must be no dependence on the fiscus."

"The Unions agreed that in arriving at a solution for SAA, some jobs will be lost, and that employees that remain behind will need to sacrifice some of the unaffordable arrangements that had worsened the airline’s financial position. It was agreed that social plans will be developed to cushion the effect of losing jobs on the affected employees. The IMC reiterated the reality that Government is not in a position to provide more capital to SAA, and that all parties need to commit to a creative solution for SAA to avoid a scenario where the business rescue is deemed to have failed."

BUSINESS REPORT 

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