SAA could cut up to 700 jobs

“We sadly have reached a point where we have run out of options, but to suspend SA Post Office's account,” said SAA spokesperson Tlali Tlali.  (Photo: Fedor Selivanov / Shutterstock.com)
“We sadly have reached a point where we have run out of options, but to suspend SA Post Office's account,” said SAA spokesperson Tlali Tlali. (Photo: Fedor Selivanov / Shutterstock.com)
Fedor Selivanov / Shutterstock.com

Johannesburg - South African Airways (SAA) could return to profitability within the next four years, but this year up to 700 of its staff could lose their jobs, reported Netwerk24.

SAA survives thanks to billions of rand in Government guarantees and reported an operational loss of R2.3bn in the 2013/2014 financial year. Thanks to the airline's recent 90-Day Action Plan, which ended in March, its operational expenses are 14% lower than a year ago and it will save R1.25bn in the 2015/2016 financial year.

READ: SAA says significant progress with action plan

To be profitable within four years SAA would, however, have to take make some difficult decisions, acting SAA CEO Nico Bezuidenhout told the media earlier this week.

Savings initiatives of more than R2bn have already been identified, among these are measures to manage labour costs and to optimise the supply chain.

The termination of direct flights to Beijing and Mumbai since April 1 will already save SAA about R600m per year. SAA did admit, however, that its labour cost remains high.

The airline has been in discussions with unions since May about the intended restructuring of its staff. The jobs of about 700 SAA and SAA Technical (SAA's maintenance company) employees could be affected, Derek Mans of the union Solidarity told Netwerk24.

Mans said the unions are still discussing the economic merits of the planned staff cuts and there are no indications of which type of staff would be targeted.

"SAA expects to have its staff count down by 10% through offerings of early retirement or voluntary severance packages," said SAA spokesperson Tlali Tlali.

The SAA group - which includes Mango and SA Airlink - currently has about 11 500 employees globally. At first glance it does not look good compared to a profitable African airline like Ethiopian Airlines, which has 77 planes in its fleet, but only 7 642 employees.

The group's spending on salaries and employee benefits increased by 8% during the 2013/2014 financial year to about R5.3bn, according to SAA's latest annual report.

ALSO READ: SAA could return to profit in 4 years - CEO


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