Johannesburg - Vuyani Jarana, who took over as the CEO of SAA in November, plans to present a restructuring plan to the beleaguered airline’s board of directors by the end of this month.
In an interview with City Press’ sister publication Rapport, Jarana said the focus of his plan would not be on getting rid of jobs.
But sacrifices would have to be made because the SAA of the future would have to look very different.
In September, Finance Minister Malusi Gigaba announced that SAA would be given a bailout of R3bn as operating capital and to service its debt.
Jarana said he was busy putting together a restructuring plan in consultation with his management team, the unions and the SAA Pilots’ Association. During the course of this month, he would consult with all stakeholders.
“Only thereafter will we have a blueprint from which we can work,” he said.
“Things are going to change, but we don’t know exactly how as yet. We have no choice but to push through some painful decisions.”
Jarana’s assertions came after news broke that the airline would withdraw six of its Boeing 737-800s in the next two months.
An internal notice was sent to SAA’s pilots in which they were asked if any of them would be interested in contracts at other airlines in South Africa or overseas.
This sparked fears among pilots that between 30 or 40 of those who would potentially be affected by the withdrawal of the Boeings could lose their contracts and their position on SAA’s seniority list of pilots.
One pilot, who could not be named because he was not authorised to speak to the media, said they feared they would be forced to find contracts elsewhere.
In 1994, pilots reached an agreement with SAA in terms of which the national carrier would be allowed to establish an affiliated airline (such as Mango), but if it planned to reduce the number of pilots it employed, the most junior pilots would be the first to go.
Negotiations with more senior pilots would focus on other options.
These could include accepting temporary contracts with airlines abroad, a reduction in work hours, unpaid leave or early retirement.
In the past, senior pilots have been allowed to take these options, provided they retained their positions on the seniority list at SAA.
Two of the Boeing 737-800s that are being leased from Safair will be returned.
The other four will be transferred to Mango for use on domestic routes. SAA previously used these planes on the domestic route to Cape Town.
Jarana said some flights along domestic routes had already been scrapped.
“We simply can’t afford to compete with low-cost airlines by trying to operate planes on routes that are not profitable,” he said.
“We’re going to focus on the profitable routes and ensure that we deliver such good service that we beat the competition.”
Jimmy Conroy, president of SAA Pilots’ Association, said the union had not participated in any negotiations yet.
It had, however, held meetings with Jarana on several occasions, and Conroy said his inclusive approach was refreshing.
An internal memorandum to airline personnel said Mango would have to put two of the transferred Boeings into operation on February 20 and 21.
The other two would go into operation on March 21 and April 21.
The memorandum said Mango would have to increase its training to make sure crews were available, but two of its Durban-based training captains are off sick, placing strain on its personnel there.
Jarana said SAA’s biggest problem was that it was not being managed profitably.
To return to profitability, he said that a lot more was required than just letting employees go.
“On the technical side, SAA is strong. On the management and financial side, we are very poor. Our procurement processes are dated. That’s why we want to appoint a procurement specialist to strengthen these departments.”
Rapport previously reported on problems regarding the availability of spare parts for SAA’s fleet of planes.
There had been complaints about the chaotic management of the parts department, which had sometimes meant that a particular plane had to be flown to Cape Town because that component was available only in the Cape Town stores.
In other cases, records were so disorganised that it was impossible to figure out where the parts were available.
Jarana said another issue was currency control measures in Angola and Zimbabwe.
Angola’s central bank had prevented SAA from taking R1bn in profits out of the country. In Zimbabwe, the amount was close to R150m.
Jarana said this issue would have to be resolved at government level and was out of his control.
“What is important is that it could be a major cash injection for us that we desperately need.”
Jarana’s main goal is to restore pride in SAA among South Africans.
“Nobody tells me what I can and can’t do. I’ve already made the diagnosis and there is more hope here than despair.
"Now we just need to treat the maladies.”* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER