SAA pilots set to rebel over costs trim plan
Incoming chief executive of the national carrier will have a tough time getting airline aloft
FINANCE MINISTER Malusi Gigaba can expect stern resistance from the SAA Pilots Association if he wants to proceed with his plans to “rationalise” the incentive scheme of the national carrier’s pilots.
Gigaba on Friday told legislators there was a need to revisit what SAA pilots get paid as a cost-saving measure, while also tacking transformation and gender progression in the industry. “We need to rationalise incentive scheme of our pilots.
“The incentives of the pilots must also deal with gender and racial dimensions. Women pilots at SAA have not been in the industry for long, meaning their pay is less than their male counterparts.
“This means that your most senior captains get to choose which routes they want to fly.
“There is a lot I could say in this regard, which I think I shouldn’t say here because we still have to meet with the board and take a decision on the issue of incentives,” Gigaba said.
The chairperson of SAA, Dudu Myeni, has previously taken aim at the incentives that the national carrier’s pilots get, saying that while the pilots constituted only 12 percent of the carrier’s total workforce in SA they accounted for more than 40 percent of the airline’s salary bill.
Cathy Bill, the general manager at the SAA Pilots Association (Saapa), said it was not true that pilots were overpaid and enjoyed more bargaining power than the rest of the national carrier’s employees.
“All pilots at SAA get the same pay and are based on years of service. We do a benchmark exercise every five years and South Africa’s salary measures compared favourably to what is being paid internationally. We use the Hay system to benchmark what is reasonable pay for our pilots,” Bill said.
The organisation said antagonising the pilots meant the risk was high of losing skilled and experienced pilots at SAA.
Saapa said most of the 750 pilots of SAA meet the international requirements to work abroad and have a cumulative total of more than 12 000 years of experience at SAA alone.
The national airline is set for a tense face-off with its employees after the National Union of Metal Workers of South Africa (Numsa) and SA Cabin Crew Association (Sacca) staged a march on Friday demanding better pay and working conditions for their members.
Irvin Jim, the general secretary of Numsa, said SAA is also refusing to increase wages for the majority of workers, including the cabin crew, ground staff, cargo staff and technical staff, but it is willing to continue paying out generous packages to the pilots.
“Pilots at SAA are pampered and they receive generous benefits and high salaries at the expense of the majority of workers. Numsa is demanding a freeze in the pay increase of the top 100 managers, including all 800 pilots, so the majority of workers can receive a long overdue pay increase,” Jim said.
SAA said in response to the march by the two unions that it was unclear why Sacca and Numsa had not resorted to using the provisions of the SAA Bargaining Forum Agreement, which provided for the appropriate platform to address demands by any party to the agreement.
THE LACK of aviation expertise in the current SAA board will mean that the national carrier’s incoming chief executive, Vuyani Jarana, will have a tough time trying to turn around the ailing company’s fortunes.
Former Skywise co-chairperson Javed Malik said on Friday that Jarana’s lack of experience in the industry, coupled with that of the board, would result in the status quo at the cash-burning national carrier staying firmly intact.
“It is going to be very challenging for Jarana, who comes from a company that does not struggle with cash flow, to understand the intricacies of a state-owned enterprise (SOE), especially SAA, which is struggling for cash.
The ill-fated Skywise ceased operations in November last year, after the Airports Company of SA (Acsa) grounded it for unpaid fees.
The high turnover of chief executives has not resulted in improved fortunes for SAA and now the airline is in need of a R13 billion recapitalisation from Treasury. The latter said it would announce its decision in its Medium-Term Budget Policy Statement in October.
Finance Minister Malusi Gigaba told legislators on Friday that he was looking at bringing the right expertise to the SAA board, but decried the appointment of other key executives before Jarana.
“I am undertaking an independent shareholder review so I can get a proper assessment of the board and then be able to take a decision on how to tighten the board and how to restructure it.
“The board has taken steps which ordinarily one would say they should have waited (to effect) until there was a new chief executive. This is with regard to the appointment of the chief restructuring officer and the recruitment of the chief commercial officer… ordinarily, the chief executive should have been party to these appointments,” Gigaba said.
The 11 non-executive SAA board members were appointed last September for three years. A government statement at the time said the new board brought with them skills that included finance; management of risk treasury, investment and projects; business strategy; marketing and management.
The board will soon have a new chairperson, after Gigaba indicated that its chairperson would no longer serve after her term expires in September.
In the current board, only Thandeka Mgoduso had prior aviation experience, as she served on the Air Traffic Navigation board.
Peter Attard Montalto, research analyst at Nomura, said investors were increasingly unlikely to approve turnaround strategies at SAA until they delivered results.
“We note the announcement of a new chairperson and chief executive for SAA as well as new board and chief executive at Eskom, but we see this as stabilisation at a weak place, rather than a turnaround. We also need to watch for a ‘sandwich effect’ at SOEs, where some parts of boards and executive management are replaced with potentially weaker members,” Montalto said.
Meanwhile, the National Union of Metal Workers of SA (Numsa) on Friday called on the entire board to step down.
Numsa general secretary Irvin Jim said: “We demand that the minister of finance remove the entire SAA board as it has failed in its fiduciary duty to ensure good, clean governance. We demand that the board be reconstituted by members of civil society, trade unions, labour and government representatives to ensure transparency and good governance.”
An SAA jet takes off from JFK International Airport in New York. The SOE’s high turnover of chief executives has not resulted in improved fortunes.
Vuyani Jarana will have a tough timetrying to turn around SAA’s fortunes.