Strike led to 'sudden deterioration' of SAA's financial position

Durban - The strike and subsequent cancellation of bookings at South African Airways (SAA) resulted in a "sudden deterioration" of the national carriers' financial position, the department of public enterprises has said. 

SAA had to cancel most of its flights due to the strike, which was called by the South African Cabin Crew Association and the National Union of Metalworkers of South Africa on November 15 due to the airline announcing it would need to retrench just under 1000 staff. The strike ended on November 23 with wages increased by 5.9%. The unions had initially sought an eight percent increase.  

The estimated daily loss of the strike sat at about R50 million per day. 

"The department of Public Enterprises is working together with SAA to urgently formulate immediate actions that will be required to provide support to enable SAA to carry on its business. However, SAA cannot continue 'as is'," said the department in a statement on Wednesday night.  

Under the direction of public enterprises minister Pravin Gordhan, focus would be on the short-term stabilisation of SAA, which would include support from all stakeholders. The department added that other areas of focus would be addressing governance and leadership issues, including appointing an "effective" management team. 

Plans were in place to ensure the carrier returned to a "stronger financial footing" in the medium to long term. 

"None of this can be achieved without the necessary contributions by all the key role-players in the airline.  The actions being undertaken by the minister include involving relevant stakeholders so that they can participate in the support initiative," said the department, adding that further details would be provided next week. 

African News Agency (ANA)