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Due to the devastating impact of the coronavirus pandemic on airlines around the world, the trend has been a reduction in wages and benefits.
Gallo Images / Jacques Stander
- Reducing the current overly high cost structure associated with South African Airways pilots is critical, says the Department of Public Enterprises.
- The members of the SAA Pilots Association have a regulatory agreement dating back to 1988.
- SAA’s business rescue practitioners announced Wednesday that they will “shut down” all 383 union members starting at 12:00 on Friday, December 18.
In order for a restructured South African Airways (SAA) to take off, it is critical to reduce what it considers the current too high cost structure related to pilots in terms of a regulatory agreement dating back to 1988, the Department of Public Enterprises (DPE) said in a statement Thursday.
The DPE, led by Minister Pravin Gordhan, is the shareholder of SAA, which has been in the business rescue for more than a year. Employees have not received salaries since May this year and since the shutdown began in late March, only a few repatriation and cargo flights have taken place.
Business rescue practitioners announced Wednesday that they will “lock down” the 383 members of the SAA Pilots Association (SAAPA) starting at 12:00 noon on Friday, December 18. This decision comes after negotiations on a new agreement with the union failed and all internal dispute processes had been exhausted. Those under “lockdown” cannot provide any services or receive any payment. The goal is to force them to accept the terms of a new employment contract.
The DPE says it agrees with the rescue professionals’ insistence on terminating what it considers to be an onerous and costly regulatory agreement with SAAPA that does not become part of the new SAA due to its impact on the results of the airline. In the opinion of the DPE, the agreement also contributed to the lack of transformation into SAA.
The rescue practitioners want SAAPA to agree to a new agreement in terms of which the salaries of all pilots will be reduced by 50%. Your allowance per day will also be reduced. The DPE considers that the restructuring of SAA is the best opportunity to agree on new employment conditions.
Due to a clause in the SAAPA regulatory agreement that means that despite any change in ownership of SAA, the regulatory agreement will remain fully operational, the DPE is of the opinion that it will make SAA less attractive to potential investors if it remains in site.
Finance Minister Tito Mboweni allocated funds to implement SAA’s business rescue plan (R10.5 billion) in his medium-term budget. It is supposed to cover severance packages and voluntary redundancies (around R2 billion) for employees.
The rescue plan only foresees about R2 billion in working capital to get SAA back up and running. That is why it is essential that the government find a suitable strategic capital partner for SAA to get it back on track. A new AEA is anticipated to initially only require 88 pilots.
“As we embark on the airline restructuring process, it is imperative to ensure a significant transformation of the national airline. Regarding potential SEPs, the DPE insists that national development goals in aviation should be prioritized in the new SAA “, states the DPE.
“It is unfair and unfair for pilots to expect all other categories of SAA workers to reduce their wages and benefits while maintaining the status quo and contributing to the high cost structure and high salary bill, which the new airline cannot afford.” .
He points out that due to the devastating impact of the coronavirus pandemic on airlines around the world, the trend has been a reduction in wages and benefits so that the overall profit for airlines and the industry takes off again.
