SAA must be shut down permanently
ONE OF the primary factors behind SAA’s financial meltdown is that it pays its employees far more than they would receive at other airlines: salaries paid to cabin and operations crew are apparently about 50% higher than the industry standard, while pilots and office personnel apparently earn approximately 2.3 times more than their peers.
This has saddled SAA with a wage bill of more than R6 billion per annum, which contributed significantly to it making a loss of more than R5 billion per annum in 2017, 2018 and 2019.
Consequently, it should come as no surprise to hear that the government wants to retrench around 3 700 of SAA’s 4 700 employees and is offering extremely generous severance-packages: apparently, everyone is guaranteed a minimum of R200 000, which is roughly what a pensioner receives over a period of 10 years!
Furthermore, the average package amounts to a mouthwatering R580 000, which borders on scandalous when one considers that employees would receive a maximum of R32 000 if SAA were liquidated, and are likely to be rehired (by SAA) if everything goes according to plan.
In contrast, creditors like SA Airlink will receive 7.5 cents for every rand they are owed and may have to wait up to 3 years for payment.
Unfortunately, greedy SAA employees – who went on strike several months ago for an aboveinflation increase – realise that the government doesn’t want a showdown with the unions and hence are refusing to accept the offer.
All of which is relatively unimportant when one notes these retrenchments are part of a hastily concocted plan that will see SAA retaining about 1 000 employees and running at an estimated loss of R19.9bn over the next 3 years (due largely to the impact of Covid-19 and the need to hold on to routes that may become profitable later).
What our cash-strapped nation really needs is for SAA to be shut down permanently.
The only hope, therefore, is that someone like Finance Minister, Tito Mboweni – who has promised to reduce the government’s wage bill by R160bn – will bring government to its senses. One should not, however, hold one’s breath while waiting for this to happen.