Cape Town – South African Airways (SAA) chairperson Dudu Myeni’s attack on the benefits enjoyed by the airline's pilots won’t be a good strategy in turning the ailing state-owned carrier into a profitable business, the SAA Pilots’ Association (SAAPA) said on Thursday.
SAAPA chairperson Captain Jimmy Conroy was responding to a letter Myeni wrote to Parliament, in which she blamed her pilots for the cash-flow drain of the national carrier.
“Ms Myeni seems to be basing her turnaround strategy on attacking the pilots’ benefits,” Conroy told Fin24 by phone. “I believe if that is the case, then it is doomed to fail.
“Her comments are creating a hostile environment for the pilots,” he said. “It is causing a number of them to consider their options with regard to moving to other airlines.”
Myeni was responding to a question by Democratic Alliance MP David Maynier, who asked her whether she still believes that it is still in the best interests of the airline that she doesn’t resign.
This was in response to confirmation that SAA made a loss of R4.7bn in the 2014/15 financial year and is projected to make a loss of R1.8bn in 2015/16. The airline only tabled its 2014/15 results in September and have yet to table its 2015/16 financials.
In a letter to the Standing Committee on Finance on Thursday, Myeni refused to resign, citing historical and current transformation issues as reasons for the airline’s failures.
Myeni said she has “taken a dim view of the exclusive benefits enjoyed by the pilots, as have been exposed in the leaks from SAA by those who are not happy with the board’s moves to correct the situation”.
“The Pilot Evergreen Contracts, which consume billions from the revenues, represent a hobbling historical decision,” she said. “I never signed those contracts, yet the DA finds a scapegoat in me for all these things.”
She said SAAPA had used “every means to resist the attempts to restructure the pilots’ unprecedented evergreen contracts that are a significant drain on the cash-flow of SAA”.
“The pilots are costing the SAA in excess of R600m per year in excessive guaranteed benefits - constituting a huge chunk of the losses SAA recorded ...
“The structure of these agreements is such that even if SAA were to be sold to another shareholder, they (the agreements) would continue to bind the new shareholder.”
Conroy said that while SAA pilots are well paid, they had been careful not to increase their salaries according to international norms.
“We conduct one of the best conditions of employment benchmarking exercises in the country or the world,” he said. “The last benchmarking we conducted in 2014 revealed we should have taken a 19.5% increase. Bearing in mind where the airline was, we took a 5.33% increase.
“Pilots possess certain skills and they are mobile if necessary or are forced to,” he said. “As a result, remuneration tends to be quite high.”
In her letter, Myeni said SAAPA had “recently petitioned the courts to stop the board from slashing their benefits”.
“SAA buys cars for pilots. Yet again this matter, which threatens the sustainability of SAA, is a non-issue for those who continue to attack the airlines leadership.”
However, Conroy said no such court action existed. “We are not in any court case to slash or protect our benefits,” he said.
He said they are in arbitration over SAA handing over aircraft to Mango and not using SAA pilots to fly them.
“SAA is shrinking as Mango expands and uses SAA aircraft,” he said. “SAA pilots should be flying for Mango, but SAA is of the opinion that Mango is a standalone company.”
Myeni believes she is SAA’s champion for transformation and said employment equity remains one of the biggest challenges facing the airline.
“The powerful vested interests have used every means available to defend and further entrench their positions to the exclusion of the majority of the people,” she said.
“In the process, the board, and particularly, current, as chairperson, have been attacked by various forums including the media.”
However, Conroy said SAA employs 90% of South Africa’s total black pilots with an Airline Transport Pilot licence, which is a SAA requirement.
That equates to about 73 of the 84 black pilots with this licence in South Africa, he said. SAAPA has about 750 pilots, he said.Read Fin24's top stories trending on Twitter: Fin24’s top stories