Pilots threaten SAA flight plan

Union Saapa opposes business rescue plan for reduced payouts

The dominant pilot union at SAA, just over a week into its first strike in more than 50 years, says it will continue the industrial action for as long as it takes to see its demands met, among them that the embattled airline retrench them at their existing salaries by Wednesday.

The strike will prevent SAA from using SAA Pilots’ Association (Saapa) members, who include senior pilots, instructors and check pilots to re-train and certify pilots, said Grant Back, chair of Saapa and a captain at SAA, on Friday.

This includes seven Saapa management pilots and instructors who were not included in the lock-out of SAA pilots but have joined the strike.

Saapa, which represents 89% of pilots at SAA and has been locked out of the airline by its business rescue practitioners since December 18, maintains its strike action is a direct “defensive” response to the lock-out.

“They [the business rescue practitioners] did not lock out seven Saapa pilots who are management pilots and instructors. In the airline industry these are called post holders and they need to occupy these positions in order for the airline to maintain its air operating certificate [AOC],” said Back.

“Without these post holders and instructors at the airline it will prevent further operations. Due to the strike they don’t have anyone, as required by Civil Aviation Authority [CAA] regulations, holding those posts and they can’t operate now without those posts being filled.

“Plus, there is a CAA safety audit scheduled for May and if that safety audit isn’t done there is a possibility that SAA will lose its AOC.” He added that SAA has access to a few pilots who are members of the National Transport Movement or are not unionised and who are not locked out.

As this is a “defensive strike” in response to the company’s lock-out of the union, the airline is prevented from bringing in “scab labour” or outside training organisations and it could potentially result in SAA losing its AOC and derail any potential relaunch plans, Saapa said.

The strike also prevents SAA from conducting cargo flights, such as for vaccines.

Siviwe Dongwana, one of the joint business rescue practitioners for SAA, said on Friday that according to their “labour lawyer advice, we are entitled to employ scab labour because we believe the move by Saapa is not a defensive strike”.

He conceded that in terms of the regulating agreement between Saapa and the airline, which dates back to the late 1980s, the strike action did indeed prevent training and cargo flights.

“This is one reason we want to cancel the regulating agreement. To run a commercial airline we need to be doing cargo and training flights.”

In terms of the business rescue plan, the new, restructured SAA will retain only 88 of more than 700 pilots.

Back said most of the pilots to be retained have not flown for a year and need retraining and testing. “How is this going to happen without instructors?”

Back said Saapa wants the business rescue practitioners to retrench them on their existing salaries, “as is the law”, adding that during negotiations last month the practitioners had tried to get the union to agree to accept retrenchment packages based on proposed new salaries which would see their current salaries cut by 50%.

Back said this retrenchment offer at half the existing salary only applied to pilots, which was “prejudicial and unfair”.

He said other SAA staff, including management, are being retrenched on their existing salaries.

A later proposal by the business rescue practitioners suggested the retrenchment amount between the old and new salaries would be paid to pilots over three years with funds from the receivership.

“Again, no other employees have been subjected to this condition. What guarantees are there if SAA fails and after a year goes into liquidation? There aren’t any and that is why pilots are not willing to accept this prejudicial treatment. No other group was forced to take their severance pay over three years. Why only the pilots?”

However, Dongwana said the pilots were “the most expensive labour force at the airline”, with an average salary of R2.7m a year, and that there is simply “no money to be able to pay them a flat settlement now”.

Dongwana said the proposal from the business rescue practitioners to the pilots was that they would be paid out on “their [the pilots’] current terms over the next three years”.

The business rescue practitioners say the pilots’ strike will not delay the finalisation of the SAA business rescue process, which is due to be wrapped up soon.

Dongwana and Les Matuson, the other business rescue practitioner, had hoped to complete the process and hand the airline back to its interim board by the end of last month, but they said this week it had been delayed by an administrative snag regarding the formation of a receivership.

“We have one more administrative issue regarding the establishment of a receivership and then we can file for substantial implementation,” Dongwana and Matuson said this week.

Once the business rescue practitioners have filed a notice of substantial implementation and SAA is discharged from business rescue proceedings, a receivership will begin and it will be tasked with paying monies owed.

The two said the establishment of the receivership was imminent, but did not give a timeline.

Asked whether the pilot strike would affect their exit from the business rescue process, the practitioners said the impasse with Saapa does not need to be resolved in order for them to file for a “substantial implementation of the business rescue plan”.

With the exit of the business rescue practitioners probably just days or weeks away, attention shifts to who the interim board will appoint to lead the airline’s relaunch.

The group has been without a CEO since acting CEO Zuks Ramasia took early retirement in April 2020 after assuming the role in June 2019 following the resignation of Vuyani Jarana. SAA’s commercial director, Philip Saunders, left in December 2020.

Asked this week about the appointment of a CEO, the business rescue practitioners referred Business Times to their previous comment stating that it was never their role to appoint executive management, while the department of public enterprises referred Business Times to SAA, which did not respond.

The department previously said the interim board had been tasked with ensuring that an experienced management team with the requisite expertise be appointed at SAA to ensure a smooth transition from business rescue.

While there has been no word yet on who the new CEO will be, whoever is chosen will have their work cut out for them as the global aviation industry is in crisis as a result of the pandemic.

Chris Zweigenthal, CEO of the Airlines Association of Southern Africa, said the new CEO will have to be a “very strong leader”, able to work with “multiple stakeholders with different interests”, and will have to “put together a very skilled team to recommence operations successfully”.

“It’s going to be a very tough job to get going.”