Debt-laden South African Airways has informed its 5,149 employees worldwide that nearly a fifth might be made redundant in a new radical turnaround and restructuring programme for the struggling airline. In a statement released this morning, the airline said that up to 944 employees might be made redundant but that a final decision hadn’t yet been made and a consultation process is still to take place.
The announcement from the airline may well pit it against employee workgroups, including the South African Airways Pilots Association (SAAPA) who published a deeply critical report of the airline’s management in September. As part of the report, pilots were polled by an independent research company on their willingness to go on strike – 96 per cent said they were in favour of taking a “proactive stand” to force change.
Meanwhile, 91 per cent of pilots said operations management was “poor” or “extremely poor”. Issuing a list of demands, the union called on the airline to appoint a new chief executive or face the possibility of it taking further action. Today’s announcement by the incumbent CEO is likely to inflame tensions even further.
The airline’s previous chief executive left the company in June with less than two years in the job. He cited a lack of government support for his turnaround strategy as the main reason for his resignation. Vuyani Jarana was replaced by acting chief executive, Zuks Ramasia who has previously come to blows with the airline’s cabin crew union.
“We urgently need to address ongoing lossmaking position that has subsisted over the past years,” Ramasia explained in a statement released by the airline this morning.
“That is why we are undergoing a restructuring process that seeks to ensure effective implementation of the accelerated Long Term Turnaround Strategy amidst the present prevailing operational challenges,” she continued.
“It is a matter of great regret that we will part ways with some loyal colleagues. We are taking all possible steps to ensure these changes are managed in a caring manner and that everyone is treated with dignity.”
Ramasia has promised to “engage meaningfully” with recognised unions and employee groups when it comes to deciding the number of employees to be redundant and what kind of redundancy pay they can expect to receive. No final decisions have been made, although it is known that the restructuring will include every department of the airline group – although it will exclude its low-cost subsidiary Mango Airlines.
South African Airways still hasn’t published its financial results for 2018 but that hasn’t stopped some media outlets estimating the losses made by the airline – around R9 billion ($606 million).
In it’s most recently published financial results for 2007, the airline recorded a loss of R5.6 billion. At the time, SAA said it hoped to break even in this financial year – an aspiration that looks almost certain not to be met.