SAA strike: union wants urgent meeting with Mboweni, Gordhan

The National Union of Metalworkers of South Africa (NUMSA) has told Finance Minister Tito Mboweni it wants an urgent meeting with him about turning around embattled South African Airways (SAA), and it wants to meet Minister of Public Enterprises Pravin Gordhan about the issue as well.

NUMSA general secretary Irvin Jim said that, on his way to start a Commission for Conciliation, Mediation and Arbitration (CCMA) with SAA on Saturday morning on wage increases at the national carrier, he called Mboweni to say such an urgent meeting is needed. The same call is planned to go out to Gordhan.

By late afternoon on Saturday the CCMA negotiations were still going on.

NUMSA and the South African Cabin Crew Association (SACCA) members at SAA started an indefinite strike on Friday. They are demanding an 8% salary increase. SAA, in turn, says it cannot afford to pay any increases. However, it has offered the unions a 5.9% salary increase "when funds are available".

Jim told union members on Saturday that they must stick to their guns and insist on a wage increase. He said this time round the union will not be fighting the pilots and that the pilots have shown it is possible to receive an increase.

In terms of a legally binding 5-year salary agreement, currently in place after a prior arbitration process, members of the SAA Pilots Association (SAAPA) get salary increases of 5.9%.

Since the beginning of last year, SAA reduced its number of pilots by 122, or 18%, to just below 600. The cost to company of pilots to the airline is now 10% lower.

The unions are also demanding immediate insourcing of certain services like security and cleaning and it wants those found to have been involved in irregularities or corruption to be taken to task and the money their actions cost SAA to lose to be reclaimed from them.

SAA announced on Monday that it is embarking on a restructuring process which may affect 944 jobs - almost a fifth of its employees. The restructuring excludes SAA subsidiaries SAA Technical, Mango Airlines and Air Chefs.

SAA has cancelled numerous flights since the strike began. It has since extended the cancellation of all domestic and regional flights scheduled for Sunday November 17 and Monday November 19, 2019 as well but will operate all international flights departing from OR Tambo International Airport from Sunday.

"To resolve this dispute is going to require both the management and the board of SAA and government to shift their position. We think SAA can be saved and turned around, but we are of the view that some in government have taken the view that, unless SAA is privatised, there can be no other solution," Jim commented ahead of the start of the CCMA negotiations.

"We are here today to negotiate about a dispute on wages for workers, benefits and conditions, but there is a bigger challenge beyond just wages. That is why we need an urgent meeting with both the minister of finance and of minister public enterprises on how the airline can be turned around."

Earlier this week Bloomberg reported that Gordhan said in a speech at a conference in New York that SAA is not too big to fail and that some tough decisions needed to be made.

Fin24 understands that SAA is currently under pressure to secure R2bn in working capital, which it needs before November 20. This may have added impetus to the restructuring.

Government has said it does not want to extend further support to state-owned entities. Mboweni announced last month that any further financing will be in the form of loans, that will have to be repaid with interest. Over the past 13 years, SAA has incurred over R28bn in cumulative losses.

Martin Kemp, SAA Acting general manager for human resources, said in a statement on Saturday morning, ahead of the start of the CCMA negotiations, that the airline management recognises the contribution made by the airline and its employees to SA's economic growth, specifically in the context of outbound and inbound tourism.

"It is in the public interest that this dispute be resolved. The union’s willingness to find a resolution is laudable," said Kemp.

"This is a critical time for the airline, and we will not give up on saving jobs and securing a future for the airline. Our efforts are focused on finding solutions that accommodate the employee demands, safeguard the business and return operations to normal. We are exploring all possible avenues."

SAA estimates it is losing R52m a day due to the strike. NUMSA and SACCA, in turn, questions why the airline is willing to lose this much money when it could have been put towards meeting the wage demand.

SAA has warned earlier that there may be "no recovery" from the strike. This view has been echoed by some experts in the aviation and hospitality industry.

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Yes. We need the money.
11% - 988 votes
It depends on how the funds are used.
74% - 6583 votes
No. We should have gotten the loan elsewhere.
15% - 1377 votes