South African Airways unions have largely indicated acceptance of voluntary severance packages as part of the airline’s rescue, after the government warned that workers’ representatives that it cannot improve on the severance offers.
Cockpit union SAAPA has not followed other unions’ gradual shift into accepting the proposals, but it appears increasingly isolated and is facing criticism from the government over its stance.
The business rescue plan drawn up for SAA has outlined a relaunch strategy that would only have initial places for around 1,000 personnel, on amended terms and conditions.
It sets out R2.2 billion ($129 million) in severance funding for workers whose positions will be made redundant if the rescue plan is accepted – a creditor vote is due on 14 July.
“It is important that we ensure that we have an airline that emerges from the business rescue plan that will not be burdened by an unsustainable agreements,” says the government’s department of public enterprises.
It states that the R2.2 billion budget for severance is “the best that can be made available” given the “massive” financial demands and constraints faced by the government.
“[We are] not in a position to accede to any further demands from sections of union leadership for additional benefits,” it adds.
Four unions – the NTM, SATAWU, AUSA, and Solidarity – plus non-unionised staff had already signalled a commitment to the severance packages.
Three other unions – the pilots’ union SAAPA, cabin crew group SACCA, and the NUMSA organisation – had sought to address outstanding concerns over the situation and met with the department on 3 July.
The three unions have been particularly resistant to the business rescue scheme and the associated employee retrenchments, which will affect around 2,700 staff.
But NUMSA and SACCA have fallen into line with the other unions, leaving just the pilot association SAAPA outstanding.
The department of public enterprises says it is “a concern” that the pilots have embarked on a “parallel process” through which they intend to consult the business rescue practitioners in an effort to obtain “unaffordable” concessions.
It says a proposal from the pilots aims to generate R290 million in cost savings, compared with the current business rescue plan.
But the department has rejected this claim, stating that it believes the restructured SAA will be “burdened” by the proposal which, it argues, will lead to expenditure that “far exceeds this purported saving”.
This additional cost presents a “very distinct” risk, it adds, that the new airline will not be financially sustainable, and the department is urging the pilots’ association to join the other unions in supporting the severance arrangement.
“[We are] not in a position to accede to any further unreasonable and greedy demands from sections of union leadership for additional benefits,” it adds.
Average severance packages for pilots would amount to R1.96 million, and R352,000 for cabin crew.
If the business plan is rejected, SAA faces the possibility of liquidation. The department states that “all stakeholders, particularly employees, stand to lose” in such circumstances.
