SAA: Why waste time arguing over a dying horse before shooting it in the head?

Pacta sunt servanda; the Latin term for the legal doctrine “agreements must be kept” …

It’s been part of our common law since time immemorial and challenged numerous times, but seemingly always stood strong. Seems fair. If you enter into an agreement, you should keep to it. That makes sense … until you start seeing some pretty wild agreements.

If you’ve been following the story of SAA since its predecessor Union Airways formed in 1929, I commend you for sticking with a rather torrid story of brilliance, bans and bailouts. If you fast-forward to 2016, you’d have started to hear about “evergreen contracts” as stories broke about pilot perks most CEOs can’t even dream of.

What is an evergreen contract? It’s a term used to describe an agreement with no exit clause other than requiring both parties to agree to terminate before the contract can be terminated. Would you agree to terminate a rather lucrative agreement? No!

And owing to these “evergreen contracts”, coupled with the pacta sunt servanda doctrine, it never looked like SAA was getting out of those contracts … and still doesn’t.

In 2016, it was reported that the pilots cost the airline R2 billion, including a total benefit package of nearly R700 million. Sure, everybody deserves their perks, but surely somebody needed to ask an ailed airline manager how cost-effective this was in the bigger scheme of things, considering that those perks reportedly included free family flights, 5-star accommodation and excessive leave, over and above great pay.

In fact, somebody did ask … and asked specifically about the evergreen contracts. In 2017, Themba Godi, then chair of parliament’s standing committee on public accounts (Scopa) asked then acting CEO of SAA Musa Zwane how many evergreen contracts SAA had … even throwing in an ode to their age, claiming, “This is a legacy of the apartheid past which you are carrying forward with you.”

Only in South Africa could a response to a question like that both shock but fail to surprise you. Zwane’s response was that he needed to check his database. As recently as March this year, Thapelo Chiloane merely mentioned in a Scopa meeting that evergreen contracts were contributing to the downfall of the economy.

“People are just eating money.”

She went on to instruct that the sixth parliament, especially Scopa, should put the issue back on the agenda.

And that seems to have been the end of that.

Turns out, people at the top are aware of the issue but there is little political will to deal with it, and this is where the law falls short. In this instance, it protects those who hardly need protection. The pilots’ union is pretty powerful as far as unions go and insofar as a the pilots themselves go, going on reports, it’s not like they won’t easily be swooped up by a bigger international carrier should they lose the SAA perks, so sucking on the juicy teat until it bleeds and kills the mother isn’t an issue if they can simply move on to a surrogate with less juicy, but still very juicy, teats.

In short, the pilots, especially the seasoned ones (who one may expect hold the political sway), don’t seem to have an incentive to keep SAA alive long term at the expense of their perks.

While this affects taxpayers, the capacity of the state and the ability to maintain the airline, none of that seemingly attaches to constitutional values stronger than the freedom to enter into contract. So it’s no surprise that the law stands in the way of cutting one of the major costs of the airline. What is a surprise is that nobody with any authority saw this and actively did anything about it. Sure, they spoke about it, but insofar as doing anything, psh.

Even if they managed to get something done, the litigation bill may offset a lot of what is regained.

This raises a number of questions, such as how could the airline not adequately prepare to deal with these contracts, knowing them to be evergreen; how could leadership of the airline not prioritise knowing the basis of one of its largest costs; and why did we keep pumping bailout money into an airline clearly knowing we’d never get our money back.

Honestly, I have no idea. Perhaps too many people were enjoying perks. Perhaps nobody wanted to take the blame for the once proud airline’s demise. Perhaps those in charge just couldn’t be decisive enough. I’d argue it’s a strong combination of all of the above and more, but why waste time arguing over a dying horse before shooting it in the head?

That’s exactly what SAA has become: the animal in pain is being kept alive with the money of others so that those who don’t actually have to worry about the animal can fly away with peace of mind that, no matter what, they’ll be flying again tomorrow (or whenever, in the unlikely event that they run out of leave).

With a debt of more than R9 billion following more than R50 billion in bailouts over the years, the state could take all that bailout money, fund every one of its some 10,000 employees to go to pilot school and eventually farm them off to Emirates or even build up the air force to give them experience before farming them off.

Coupled with new international tax proposals, that way South Africa may even make some money off the death of SAA …but that would require decisive action, and when last have we ever seen something like that?

I mean, if there’s one thing evergreen contracts cannot survive, it’s the death of a party to the contract, but then that party actually has to die. Cheers SAA.

In all my years, I’ve never flown you because, well, Egypt Air was usually cheaper and better, but I’ll always remember the biggest impact you had on my life: how you flew over the stadiums before a big sporting event … oh, and how the country would have been no worse off if I didn’t pay tax and you didn’t exist.

Remember that time Jacob Zuma made a disparaging remark about one of our roads not being some road in Malawi. With a fleet of only two, Malawi may soon start telling us that at least they have a national carrier.

Richard Anthony Chemaly.

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