South African Airways Mulls Axing Jobs Quicker Than Planned

Financially struggling, recent reports suggest that South African Airways may be expediting its plans to cut jobs. A spokeswoman for NUMSA – the National Union of Metal Workers South Africa – says that the airline has told unions it must fire over 944 workers in order to secure much-needed funding to continue operations.

south african airways SAA plane airbus
South African Airways desperately needs money from the government. Photo: Airbus

Losing money since 2011, the state-owned Development Bank of Southern Africa recently prevented the collapse of South African Airways by giving the carrier access to 3.5 billion rand (US$239 million).

There are strings attached to this money, however, and a team of business rescue experts has been put in place to come up with a plan to save the troubled carrier.

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944 workers

In November, SAA said it might fire about 944 workers in order to turn the company around after nearly a decade of losses. However, the news sparked outrage among workers, leading to a week-long strike and numerous flight cancellations.

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The strike forced SAA management to cede to worker demands and backtrack on the proposed job cuts. Furthermore, a 5.3% pay increase was instituted. While it was better than a prolonged strike and more canceled flights, the move didn’t help the airline with its underlying financial problems.

Now, with the Development Bank’s cash injection and the business rescue team in-place, job cuts are back on the table. Speaking with Bloomberg News, this is what a union spokesperson had to say:

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“They want the process to be completed as quickly as possible…We don’t accept those terms. You are asking us to accept massive jobs losses without providing us with any detail.” – Phakamile Hlubi-Majola, National Union of Metalworkers of South Africa spokesperson

Some of the airline’s A340s have been put up for sale. Photo: Airbus

Union workers including Numsa and the South African Cabin Crew Association, blame the airline’s financial woes on airline mismanagement. The two groups have requested a meeting with SAA’s creditors in order to understand the need for job cuts.

The person in charge of SAA’s business rescue, Louise Brugman, says that a meeting with the unions is scheduled for today. However, she told Bloomberg that she couldn’t immediately comment further.

Corruption and maladministration

The news of accelerated job cuts comes at a time when the airline also faces an investigation into corrupt practices and mismanagement.

On 31 January, the president of South Africa stated that he believes there is corruption and suspected maladministration within South African Airways. As a result, the carrier faces probing from special government investigators upon the President’s orders.

The gazette was published on 31st January 2020 and states: 

“…the Special Investigating Unit are to investigate as contemplated in the Act, any alleged: (a) maladministration in connection with affairs of the SAA; (b) improper or unlawful conduct by the officials of the employees of the SAA; (c) unlawful expenditure of public money or property…”

The extensive document continues to list allegations that will be investigated, including travel rebates. Notably, it also nods towards issues with Airbus aircraft. The declaration states that the airline’s contract for the acquisition of its Airbus needs to be investigated.

SAA Airbus A350 Aircraft
Acquired via a three-year lease, the A350 is significantly more fuel-efficient than the airline’s aging A340s. Photo: South African Airways

Conclusion

Finding ways of increasing passenger traffic and generating more revenue has its risks. Marketing efforts may not always pay off, especially in the face of intense external competition.

However, making a business more efficient and reducing expenses is the most straightforward action toward financial sustainability. Unfortunately, this means nearly a thousand jobs are at risk – and it’s completely understandable why these workers don’t want to go down without a fight.

How do you think unions will proceed? Are we going to see another round of job action and strikes by workers? Let us know your thoughts in the comments!

We’ve reached out to South African Airways with a request for comment. However, no response has been received at the time of publishing this article.

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Gerry S

Easy solution to avoid all these union problems. Shut the airline down, sell it to someone else who knows how an airline should run. Ethiopian comes to mind. South Africa, present time, appears to know little about airline management. Let someone who knows run it.

Albie

The quicker SAA is closed down the better. The government must stop wasting our tax money on a dead duck. There are far better airlines serving South Africa domestically and internationally.

Gary

it happens all over the world.
Where management teams can waste 10’s of millions of dollars and even more.
Then after cry poor and the workers get laid off over mismanagement.
I worked for a government department here where they got 22 million dollars for refurbishment.
Only to tear it all back out 6 months later for something else.
After that a lot of us lost our jobs as they were in the red for like 9 million dollars.
And they cut jobs to save money.

Anton

Of course it happens all over the world. But after having done business with SAA for 7 years I can honestly say that the corruption within that company is truly next level.

pierre coetzer

SAA has just announced major cuts in its network. Its entire domestic network will be axed at the end of this month except for the JNB-CPT route, and Sao Paulo, Hong Kong and Munich will be discontinued along with major African destinations like Luanda, Abidjan and Entebbe. This seems to be the only sensible thing to do in order to save SAA if at all possible, and maybe rebuild one day. Major job cuts must surely follow. And a reduced fleet composed only of A350s, A320s and maybe a couple of the newer A330s. I wish them all the luck… Read more »

PHLing

There should be enough workers close to retirement to account for 1000 jobs lost…from what I hear SAA employs a huge number of people

Gerry S

And I am guessing that many are related.