SAA to cancel flights as last effort to save national carrier

There is growing anxiety among South African Airways (SAA) employees over their future with the country’s national carrier following reports that it is considering slashing 700 monthly local and international routes to lower operational costs.

The cuts are part of a last-ditch effort to save SAA from crashing and burning financially. A government plan to sell off Telkom shares worth R14.4 billion to help provide money to bail out SAA was revealed in parliament this week.

But Fin24 quoted a confidential Cabinet memo by Finance Minister Malusi Gigaba in which he said that recapitalising the airline would only offer “temporary relief”, an indication that government will back the proposed cuts.

The flights targeted for cuts total about 17% of the airline’s short and longhaul route network and are proposed to begin in October, according to internal planning schedules which Moneyweb reported to have seen.

“Flights being reduced include some on popular domestic routes like Johannesburg to Durban, Cape Town and East London. “But wholesale cancellations of many of its regional flights are also in the offing. These include flights to destinations like Brazzaville and Pointe-Noire [Republic of Congo] and Libreville [Gabon],” said Moneyweb.

Air travellers within South Africa are most likely to feel the effects of the cuts. Industry sources believe that flights outside peak hours – in the midmorning to midafternoon time slots – will most likely be trimmed because they have lower “load factors” than those in the busy periods.

This means that nonbusiness travellers will have less of a choice in the times they can fly, but it also means that the remaining available flights, on both SAA and competitors like British Airways, kulula and Flysafair, will be more crowded than they are now.

Low-cost airline Mango is part of the SAA group and it is considered unlikely it will have its routes or frequencies cut because it is running close to breaking even, whereas the parent airline is in deep financial trouble.

SAA spokesperson Tlali Tlali told The Citizen yesterday that the airline was “looking at various options to optimise its schedule”. He added that “network optimisation is commonplace in the airline industry”.

“A few options are being considered and these are being shared with management and other internal stakeholders. No final implementation decision has been taken on any option at this stage,” Tlali said.

“SAA is aware of legally prescriptive processes that must be undertaken to initiate consultation with organised labour in the event an option to reduce employee numbers becomes unavoidable and within contemplation of the business.

“No such consultations have been initiated with organised labour and due process will be followed if the need to consult becomes a reality to deal with.” But it’s the employees who say they have been left in the dark, with no contact from SAA.

“We heard these rumours but the company refuses to divulge its plans. We don’t know what it is that they plan to do. We are left in the dark,” said SAA Pilots Association chairperson Jimmy Conroy.

“It is worrying and a concerning factor. If it’s true, we have to put our heads together on how we will respond to this.” He added that a meeting would be held next week with SAA. The South African Cabin Crew Association (Sacca), which represents 1 300 of the 1 700 SAA crew employees, were also left without a word from the national carrier.

“Management hasn’t told us anything. If it should happen, there will be job losses and we cannot even go there,” Sacca’s treasurer-general Gift Bilankulu said. She said should SAA cut jobs in an already thinly employable economy, Sacca would counter the decision.

“This is very concerning. We can’t have job losses. We will have to ask the company what is happening,” Bilankulu said.

Democratic Alliance shadow deputy finance minister Alf Lees said while it was encouraging that SAA was noticing unfavourable routes which were not profitable, it equally needed other routes to be activated.

“There are routes that need to be cut, but also routes not being flown that they gave up, including their landing spot at Heathrow. It was a profitable route,” Lees said.

“They don’t fly directly to Cape Town and Cape Town is the major tourist destination. Yet – they insist on flying tourists to Johannesburg.

“It is encouraging in a way that they are looking at these routes. There is no need to fly flights that don’t really make a profit.”

He added that while job losses were not wanted, if the situation at SAA was not fixed the entire airline could collapse. The staff-to-aircraft ratio according to international standards should be between 120 and 140 per craft, said Lees.

“SAA is at 190 – they are 46% overstaffed. If I was an employee I would be concerned and rightfully so. But the real issue is that this economy is growing and there is no job growth. Government instead is creating a job-shedding environment.” – yadhanaj@citizen.co.za