Johannesburg - SAA and organised labour are not on the same plane when it comes to SAA’s proposed turnaround strategy.
The state-owned enterprise (SOE) recently announced that it would restructure itself into domestic, regional and international business units. But labour unions claimed they were not aware of the proposal.
“This operating model was developed as early as April 2018 and has been part of various presentations with a number of stakeholders including Parliament’s Scopa (standing committee on public accounts) and Scoa (select committee on appropriations) over the past two quarters of this financial year.
“The CEO (Vuyani Jarana) has bilateral meetings with labour unions, including Satawu (South African Transport and Allied Workers Union), and the operating model has been shared extensively,” said SAA spokesperson Tlali Tlali, adding that it would enable the cash-strapped airline to place greater focus on income and expenditure-management to improve its bottom line.
“The new operating model provides for the reconfiguration of the airline into three business units, domestic, regional and international This reconfiguration of the company is to break down the silos, give strategic focus and bring greater commercial delivery”
The state-owned entity is struggling to stay afloat with a debt of R12.7billion, which the government has guaranteed.
Last year it received R5bn from the government, while the airline also managed to secure R3.5bn from banks. It was reported that SAA would grind to a halt if it did not receive a bailout by the end of March this year.
In his Budget speech, Finance Minister Tito Mboweni said SAA’s debt guarantee increased by R6.2bn in 2018. Mboweni added that battling SOEs would now be forced to appoint a chief reorganisation officer for them to apply for a government guarantee for operational purposes.
Meanwhile, Satawu spokesperson Zanele Sabela said the union was not aware of the SAA plan, likening Jarana’s announcement to the unfolding situation at Eskom.
“It's for this reason that we deemed it important to speak up to ensure the move does not affect workers adversely. We met with Jarana on Tuesday afternoon and he assured us the split into business units is not the unbundling of SAA, and should not be read as such. We agreed to have more consultations to monitor how this move will affect workers,” said Sabela.
“Unbundling is a precursor to privatisation and synonymous with job losses. We view this latest plan by SAA as a move towards privatisation. We are all too aware of the jobs bloodbath that resulted from the privatisation of Telkom and we cannot afford to see the same happen to SAA.”
Cosatu spokesperson Sizwe Pamla said the model was inappropriate. “The only meeting we had with SAA was on whether the company and the SABC should be bailed out. They raised it (unbundling), but we were saying this is not sustainable and someone needs to come and explain,” said Pamla.
SA Federation of Trade Unions spokesperson Patrick Craven said the model could lead to job losses. “We are very worried that jobs will be lost in the process of reorganisation. In that case, both Eskom and SAA haven’t explained precisely what the benefits will be. The danger is that there will be more bureaucrats and fewer workers at the bottom, which will worsen the service,” he said.
However, airline industry expert Linden Birns said the move would enable SAA to determine how to optimally respond to what he said was a continually evolving market.
“Each stream has a team and manager but, instead of existing in silos, they will be brought closer together by having them share a set of common business services, for example, HR, finance/accounts, IT, engineering etc. A business stream is a very different thing to a business unit or entity,” said Birns.
Economist Professor Jannie Rossouw said the plan would turn SAA’s fortunes around. “This will determine what’s making a profit and what’s making a loss, by having different operational accounts. That’s probably the best plan government has. I am in favour of just closing down the airline It will be cheaper.”