South African Airways’ (SAA) business rescue practitioners, Les Matuson and Siviwe Dongwana, said that notices of consultation have been issued to all the recognised unions for employees and management.
The business rescue practitioners said they had been engaging with unions, most recently at the weekend, about the situation and the intention to begin the consultation process.
“Our intention has always been to preserve as many jobs as possible through this process while still focusing on having a sustainable airline and platform for growth,” they said in a statement.
The practitioners said the events of the past few months had had a significantly negative effect on SAA’s revenue. The overall result has seen a decline of R1.3bn ($81.5m) in revenue, with a cost base that remained more or less flat.
The changes needed were therefore both structural and economic, and were urgent if liquidation — where all employees would lose their jobs — were to be ultimately avoided, they said.
The practitioners said that all 4,708 employees would be affected and the number of jobs that would exist in the restructured organisation would be the subject of the consultation process.
Significant changes to conditions of employment, including remuneration and benefits, appeared unavoidable and would be sought by agreement, they said.
According to business rescue practitioners, the success of the proposed restructuring cannot be successfully implemented without the agreement of the collective bargaining representatives of the employees (the Unions) as well as on the availability of funding to support the plan.
The scope of the contemplated organisational restructure encompasses SAA airline in its entirety, they added.
“Regrettably, this restructuring exercise, if implemented, may lead to positions being declared redundant across various job categories and in significant numbers. This may, in turn, result in the dismissal of employees employed by the company, for operational reasons,” they explained.
South Africa’s national carrier has experienced numerous financial and business challenges, and cumulated losses of some R26bn ($1.6bn) over the past six years. Load factors on the airline have declined steadily from August 2019 to a low of 71% in January 2020. Forward sales have also declined significantly with all markets showing negative or minimal growth, within a very competitive market.