Secondary airline strike could be severe blow to economy, warns industry body

A secondary strike in South Africa's aviation industry could lead to a national crisis, the Airlines Association of Southern Africa warned on Monday.

Members of the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) have been striking at South African Airways (SAA) since Friday, resulting in the cancellation of numerous flights.

SAA has since resumed all its international flights as well as flights to certain African destinations. A marathon mediation session on Saturday failed to break the deadlock, causing the two unions to express an intention to intensify their strike action.

Numsa said it would begin a process of consulting workers for a secondary strike in aviation at companies including the Civil Aviation Authority, Mango Airlines, SAfair, SA Express, Airports Company SA and Airchefs.

'Severe harm' to economy

AASA has, therefore, called on unions and management in the air transport sector to apply cool heads and to explore all options available to avert a secondary strike.

According to AASA, the air transport and tourism industries represent around R140bn in gross value added to SA's economy (about 3.2% of GDP). It also supports about 472 000 jobs directly and indirectly.
 
"Our sector is an invaluable asset to the country and vital to our already fragile economy and those of the entire region," AASA CEO Chris Zweigenthal said in a statement.

"While AASA and its members will always defend the Constitutionally-enshrined right to strike, any secondary or sympathy action will cause severe harm to our economy and, by implication, to all South Africans."

Reasons given for the strike include SAA's planned restructuring announced a week ago, which might put 944 jobs in jeopardy, a wage increase of 8% that was denied, and a demand to have certain services be insourced immediately.

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". Over the past 13 years, SAA has incurred over R28bn in cumulative losses.

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 earlier warned that there may be "no recovery" from the strike, a view echoed by some experts in the aviation and hospitality industry.

Pressure

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.

Kim Taylor, Customer Experience director at The Flight Centre Travel Group, told Fin24 on Monday that customers are frustrated by the continued SAA strike.

In her view, the strike is damaging to the image of SAA as the country's national carrier.

"SAA is one of our top suppliers. We spend about R1bn per year booking SAA from Flight Centre Group - leisure and corporate. This strike will impact on travel into SA," commented Taylor.

The International Air Transport Association (IATA) estimates that the aviation industry provides 70 000 jobs directly in SA and 113 000 jobs in the supply chain of the industry.

ZAR/USD
16.98
(-0.23)
ZAR/GBP
21.23
(-0.06)
ZAR/EUR
19.15
(-0.17)
ZAR/AUD
11.80
(-0.12)
ZAR/JPY
0.16
(-0.25)
Gold
1774.31
(+0.03)
Silver
18.02
(-0.04)
Platinum
808.00
(+0.25)
Brent Crude
42.78
(-0.79)
Palladium
1914.01
(+0.62)
All Share
54521.90
(-0.17)
Top 40
50179.89
(-0.26)
Financial 15
10150.02
(-0.64)
Industrial 25
76554.73
(+0.52)
Resource 10
50138.02
(-1.24)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1609 votes
I am taking a hit, but should be able to recover in the next year
23% - 2115 votes
My finances have been devastated
35% - 3173 votes
It's still too early to know what the full effect will be
25% - 2295 votes
Vote