South African Airways (SAA) is facing yet another bump in the rocky road to profitability, as around two-thirds of its employees are preparing to strike. The heavily unionized workforce is unhappy with the news that the airline could lay off around 900 staff as part of its turnaround plan, and are threatening an ‘indefinite strike’ as a result. The airline says that such action could spell the end for SAA.
The mother of all strikes
Staff at struggling national carrier South African Airways are due to go on strike on Friday. Cabin crew and other employees are unhappy with the carrier’s plan to cut as many as 900 jobs and are planning to take retaliatory action.
The unions, who collectively represent some 3,000 of SAA’s 5,000 workers, announced today that they would go on strike on Friday. As well as being unhappy with the proposed job cuts floated by the airline, workers say SAA has been unwilling to authorize requested salary increases.
Irvin Jim, general secretary of the National Union of Metalworkers of South Africa (NUMSA), told a press conference that the airline must take them seriously. As reported in Fin 24, he said,
"We are grounding that airline on Friday. It must not move. This is an indefinite strike. If they think we are playing, they have got it coming."
He is further reported by Reuters saying,
“We want all workers to participate in the strike. We will ground the airline come Friday. The strike will be an indefinite strike until these people come to the table.”
In another report carried by EWN, a NUMSA spokesperson Phakamile Hlubi said that the union was planning the ‘mother of all strikes’, commenting,
“…we will be preparing workers for the mother of all strikes at SAA and all its operations nationally. We have already received a strike certificate and we have concluded the balloting process."
SAA warns that a strike could spell the end
SAA has responded to the threats saying that the airline might never recover from such action. The airline has failed to make a profit since 2011, has no permanent CEO and, to be frank, only exists thanks to repeated government bailouts. CFO Deon Fredericks told EWN,
"If everyone strikes, it will be difficult to operate, it will place the company at significant risk, it may even lead to the closure of the company and that's why we requested from the unions 'let's sit and see how we can move forward as it is difficult times.'"
Acting CEO Zuks Ramisa echoed this sentiment in a statement to Bloomberg, saying, that the strike would “exacerbate rather than ameliorate our problem, and will result in a set of circumstances from which there may well be no recovery.”
The airline is deep in debt and, despite efforts to turn things around and a promise of further government propping up, the airline is still teetering on the brink of collapse. For the past two financial years, it has failed to submit full financial reporting for fear of being seen as an unviable business.
These sorts of statements show just how precarious the situation is at the South African flag carrier.
What can SAA do?
The unions are calling for an 8% pay rise across the board, as well as at least three years of guaranteed job security. Ramisa has reportedly said that a wage rise of 5.9% has been offered and that the pilots, who will not participate in the strike, have accepted this.
Clearly this is not enough for the rest of the airline’s workforce. With the threat of an ‘indefinite’ strike on the table, this news has certainly taken the shine of the carrier’s recent delivery of new A350s.
For now, the advice for any passenger booked with SAA seems to be to call ahead, but ideally to find an alternative way to travel.
For SAA, the strike by its workers could prove to be the final straw for the beleaguered airline. Although the highly unionized workforce is exercising its right to strike, should it end in a complete collapse they could just have shot themselves in the foot.