Requests being made by pilots to retain more staff at SAA are not in the best interest of the airline and won’t be considered, the department of public enterprises said on Friday.
Next week the embattled airline’s creditors are set to vote on a long-delayed rescue package drawn up by its business rescue practitioners. A vote in favour of the business rescue plan by 75% of the voting interests is required to carry the decision.
SAA went into business rescue in December last year, following years of losses and repeated state bailouts.
According to the department, the 600 pilots who make up 45% of the airline’s wage bill have, through their association, proposed that SAA retain a “much larger number of employees – in particular more pilots” in the new airline that will be created from the “old” SAA if creditors next week vote to accept its business rescue plan.
The initial plan was that 1 000 SAA employees would be retained, and around 2 700 retrenched. However, according to the DPE, the South African Airways Pilots Association has proposed that only 1 548 staff members be retrenched, and 3 099 retained.
The higher number of staff would be offset, somewhat, by increased cuts in salaries under Saapa’s proposal.
‘Unaffordable and unsustainable’
“[The proposals] purport to be affordable now, when in fact they would cause the base costs of starting a new airline to be substantially higher, unaffordable and unsustainable,” said the DPE in a statement on Friday.
According to the DPE, the pilots are also seeking improved voluntary severance packages to “incentivise senior pilots”, and opportunities for younger and particularly formerly disadvantaged pilots to advance their careers.
About R2.2 billion has been put aside to fund severance packages for SAA staff. The DPE stated that the pilots’ proposal could take up R1.986 billion of the budget.
“The DPE has informed SAAPA that their proposals cannot be accepted nor will they accede to any further unreasonable and greedy demands from sections of union leadership for additional benefits.
“This goes against the stated goal of ensuring a new, restructured, viable and competitive airline that must emerge from a business rescue process for SAA,” said a statement.
The department said it appreciated the level of commitment and cooperation from the pilots, but was concerned that “pilots are seeking benefits which are far more costly, more lucrative and financially rewarding for the pilots than any other class of employees at SAA.”
The SA Cabin Crew Association, National Transport Movement, South African Transport and Allied Workers Union, Aviation Union of Southern Africa, and Solidarity are some of the unions that have endorsed the voluntary severance package.
The Pilots Association, meanwhile, said in a statement on Wednesday that it has “no objection to South African Airways or the Department of Public Enterprises offering our individual members voluntary packages”.
The department further stated that acceding to the pilots demands would force the airline to seek additional funding for the restructuring process, and that the proposal was not in the best interest of the embattled company.
Government had already indicated that there won’t be any more funding for SAA, which went into business rescue in December 2019 following years of losses and repeated state bailouts.
The South African Airways Pilots Association is expected to respond to the department’s latest position following a meeting on Friday.