WINGING IT
SAA staff struggle to stay afloat
After flying across the world for decades, South African Airways’ past and present employees have been left up in the air, with many struggling to make ends meet since the company went into business rescue in December 2019.
Many have gone without salaries since April last year, resulting in financial strain. Some have lost their homes, are struggling to pay school fees, home loans and vehicle finance. Still others are drowning in debt, or opening small businesses.
In a presentation this month to the standing committee on public accounts (Scopa), the department of public enterprises said employees were owed three months’ salaries worth R600m for June to August 2020, when the airline still flew.
The department said it could not afford to pay the full eight months’ arrears that included the months the airline was grounded by the lockdown. This has set SAA on a collision course with unions.
“Some of the unions are demanding the full arrears salaries [but this is] unaffordable with limited funding and places the business rescue at risk,” said the department.
From March to October employees relied on the government’s temporary employer/employee relief scheme (Ters), which made up 25% of their salaries.
Some decided to take severance packages in August, which have still to be paid, while others chose to remain at SAA because they had no hope of finding other jobs.
In desperation, some employees accepted the three months’ payment and waived their right to the full eight months owed to them.
In this deal, they had to pay back the Ters money and pay full tax, which the unions argue has disadvantaged their members.
One SAA employee, who did not want to be named and has worked as cabin crew for about 17 years, said she had to move back to her parents’ home and rent her property because she was accumulating debt.
“I took a five-month payment holiday, but I have incurred more debt instead.
“My child has special needs and the school fees have been accumulating. I have had to negotiate with the school to pay whenever I can. It is absolutely insane what we are going through because I can’t find another job as I am technically still employed by SAA,” she said.
She has joined forces with a colleague, Charity Mokemane, in starting a small baking business that caters for events from birthdays to weddings. Mokemane was employed at SAA for 22 years as cabin crew and took a severance package.
“We had to make some tough decisions because debts were piling up and I couldn’t sleep,” said Mokemane. “Yes, I am married but whatever debt we took was calculated on two salaries and now that has gone. Now one person had to pay for cars, our living expenses and so on.
“I couldn’t pay for my son’s school fees, as well as mine as I was studying towards my LLB through Unisa. I had to move to my husband’s medical aid because I am hypertensive and need medication.
“We have had to cut down on a lot of things and adjust our lifestyle. We are now trying this self-employment thing because this has taken a lot of toll on us mentally,” said Mokemane.
Another SAA employee, who did not want to be named, said she had been with the company for 13 years. At the start of lockdown, she had just returned from maternity leave and had not been earning a full salary.
“They reduced flights and we started working something like two days a week instead of five. That cut our salaries short. We had to let go of our helper. We had to make arrangements for school fees, paying for the car from my savings, which have now been depleted.
“My husband had to sell his car and take his old car back from his sister. It has been a nightmare because we have been literally thrown to the dogs.”
National Union of Metalworkers of SA (Numsa) spokesperson Phakamile HlubiMajola said the three months’ pay proposed by the department amounted to nothing.
“Considering that many [employees] are not going to be part of the new airline, the three months’ pay translates to one month’s pay because they deducted all the Ters payments and tax.”
South African Cabin Crew Association spokesperson Zazi Sibanyoni-Mugambi said the unions had put many options on the table, including an equity stake for staff in the new airline, but these had been refused.
“They keep making these three-months pay offers to employees. Every month the situation is more dire. After not receiving a salary for eight months, out of desperation you give in. Slowly people break down. Holding the line is not going to put money in your bank account and put food on the table and pay for school fees.”
In its presentation to Scopa, the department raised concerns about the length of time the business rescue process was taking, and its costs, reportedly about R200m.
In October, the National Treasury gave R10.5bn to SAA to implement the business rescue plan. Of that funding, R3.5bn was made available immediately. But now the department wants an early exit from the plan.
The airline was put into business rescue in December 2019 when the state could no longer countenance the risk SAA’s out-ofBy control debt had on the fiscus.
Crippled by corruption and political interference in its top echelons, the airline had turned into a financial sinkhole, having received more than R50bn in government bailouts since 2009.
The rescue was meant to result in a “new”, leaner and more efficient airline, but this was dealt a blow by the halt to international travel to counter the pandemic.
SAA 2.0, as the new airlines was informally called, was meant to be operational last year with minimal staff. It was expected to grow to just over 2,222 employees by January, according to initial restructuring proposals prepared by the rescue practitioners, Les Matuson and Siviwe Dongwana.
The new airline was meant to operate with 88 flight-deck crew, 176 cabin crew, 37 managers, 46 specialists and 417 ground staff from July 1 until the end of December last year.
At the time, the government was considering strategic equity offers from successful airlines, among them Ethiopian Airlines and other unnamed global airlines including American ones.
This year, public enterprises minister Pravin Gordhan said the government was still mulling over three offers and was set to make an announcement soon.
Gordhan’s department rejected a plan by the rescue practitioners last year that required R10bn for restructuring. After much back and forth, which included a threat by Matuson and Dongwana to immediately liquidate SAA, the department caved in to a plan that required the same amount.
I couldn’t pay for my son’s school fees, as well as mine ... this has taken a lot of toll on us mentally
My husband had to sell his car and take his old car back from his sister. It has been a nightmare because we have been literally thrown to the dogs
An SAA employee