The Department of Public Enterprises (DPE) believes that the SAA Pilots’ Association’s (SAAPA) proposal is not in the best interest of SAA, its employees, creditors and other stakeholders. The association has endorsed the Voluntary Severance Packages (VSPs) that are being offered to individual employees of SAA.
The DPE has informed SAAPA that its proposal would exacerbate a prolonged economic recovery in a post-COVID-19 era and is concerned that pilots are seeking benefits that are far more costly, more lucrative and financially rewarding for the pilots than any other class of employees at SAA.
The airline’s 600 pilots make up 13% of SAA staff and account for 45% of the wage bill. The most junior of SAA’s senior pilots earn R3.6 million (€188 740) a year excluding benefits and incentives. Of the R2.2bn (€115m) proposed budget for the VSPs, pilots will get more than R1bn (€52.4m).
SAAPA’s proposal includes the retrenchment of 1 548 employees and retaining 3 099 employees, 435 of whom would be on a temporary layoff scheme; a further 20% in pilots’ salaries; and a 10% cut for all other employees. Retained workers would be kept on a 75% part-time basis and be paid accordingly.
“SAAPA’s proposals seek to retain a much larger number of employees – in particular more pilots – in a new, restructured, viable and competitive airline that must emerge from a business rescue process for SAA,” said the DPE.
“What SAAPA fails to recognise and accept is that the terms and conditions of employment of the pilots is still based on the premise that SAA is an internationally competitive and profitable company.”
The DPE has informed SAAPA that its proposals cannot be accepted and believes that the VSPs and a positive vote to finalise the business rescue process would be the most expeditious option for the national carrier to restructure its business and emerge as a new viable, sustainable, competitive airline.
“The reality is that SAA in its current form is financially unsustainable, insolvent and is in business rescue,” said the DPE.
“What is important in this new reality is to avoid liquidation by getting the creditors to vote in favour of the business rescue plan and then starting the long and difficult journey to regain the lost market share in the domestic, regional and global market.”
