Unions slam SAA interim chief executive’s appointment

New carrier moves closer to taking off

THE National Union of Metalworkers of SA (Numsa) and the South African Cabin Crew Association (Sacca) have criticised the appointment of the new SAA interim chief executive Phillip Saunders yesterday.

The unions said Saunders lacked the needed experience and was part of the executive leadership which helped collapse the financially troubled airline. SAA evaded possible liquidation yesterday after its contentious business rescue plan finally secured overwhelming backing from creditors and stakeholders.

Last month, a vote on the plan was put on hold until yesterday during a creditors’ meeting after some parties, including Numsa and Sacca, pushed for further amendments in it to address shortcomings.

The meeting, which was convened by the business rescue practitioners saw the plan securing 86% support, including from Numsa and Sacca.

Among Numsa and Sacca’s oppositions to the plan, was that it was not in favour of employees as it proposes 3 700 of the 4 700 SAA workers be retrenched and given voluntary severance packages (VSPs).

The unions said while they were still not satisfied with the plan, it helped avoid liquidation and offered SAA a clean break from former management and executives, who were responsible for the demise of the national carrier.

The unions, however, complained that the appointment of Saunders, who is currently chief commercial officer for SAA, undermined the break from the past executives.

“He is part of the very same disastrous management team which brought the airline to the brink of collapse. This is why we are reiterating our demand that individuals who are appointed to management and the board, must have had no connection to past boards or management at SAA,” Numsa said.

Public Enterprises Minister Pravin Gordhan commended the support for the business rescue plan and unions for conceding on the job cuts.

Gordhan’s spokesperson Sam Mkokeli said the department’s priorities were now giving effect to the funding commitments made for the business rescue plan and the appointment of a new interim board which would work with Saunders.

The Department of Public Enterprises has committed R26 billion to help fund SAA’s restructuring plan.

“In supporting the plan, the government is committed to mobilising the necessary resources to fund the transition. This includes the VSPs agreed with the unions, and meet the minimum requirements of the Labour Relations Act and Basic Conditions of Employment Act,” Mkokeli said.

Numsa and Sacca said Saunders lacked the experience needed for an airline of SAA’s scale and complexity.

“His lack of experience is likely to fail him and he will also fail the airline, an eventuality we cannot afford. We, however, understand that he is appointed on an interim basis, and we demand that the Department of Public Enterprises must come up with a transparent process of appointing a competent GCEO (executive) with the necessary expertise, experience and knowledge to lead the airline,” the unions said.

The unions also called for labour to be included on the SAA board as workers’ voices would stop them from being made the “sacrificial lamb” for executive failures and poor leadership.

While Treasury had indicated that it had no plans to bail the airline out beyond the payment of its credit, about R16bn, the SACP called on Gordhan and the government to “decisively match its words with its deeds” in financially backing SAA’s rescue efforts.

“We call on the government to make available the resources and provide the support required for the SAA rescue and operations plans to become successful,” he said.

THE PATH to the establishment of a new national carrier moved closer to fruition yesterday after creditors overwhelmingly approved SAA’s business rescue plan and the Department of Public Enterprises (DPE) named veteran aviation executive Philip Saunders as the airline’s interim chief.

The DPE said 86 percent of creditors backed the plan – 11 percent more than required – paving the way for the restructuring of the national carrier and the retention of more jobs despite a last-minute attempt by the SAA Pilots’ Association (Saapa) to scupper the process.

Saunders, SAA’s chief commercial officer, has his work cut out as he has to implement the airline’s reconfiguration into a new and viable carrier with fewer employees.

The DPE’s acting director-general, Kgathatso Tlhakudi, said the DPE backed Saunders to take SAA out of its current turbulence, as he was an experienced airline executive with a strong commercial background.

“The interim chief executive for the airline will be Phillip Saunders, who has a credible track record of leading airlines around the world, and his last position before joining SAA was at the International Air Transport Association,” said Tlhakudi, adding that Saunders would work closely with a new interim board and management team appointed to implement a fundamental restructuring of SAA.

“In the coming days, the DPE will be announcing an interim board of the new SAA,” Tlhakudi said.

SAA, which filed for voluntary business rescue after years of losses, was not allocated further funds in the emergency budget last month.

This week, the department went on the offensive against the pilots, dismissing as excessive and greedy their demands for more benefits from the proposed R2.27 billion rescue plan.

It said the benefits sought by Saapa for pilots were far more costly, lucrative and rewarding than any other class of employee at SAA.

Yesterday, the DPE welcomed the vote and applauded the creditors and all stakeholders for realising that a new, restructured, competitive airline was the best option to take back to the skies and preserve the brand of a national carrier.

“The DPE believes that the favourable vote is a much better outcome for creditors and SAA employees than liquidation, and the government remains confident that the implementation of the business rescue plan will balance the rights and interests of all parties,” the DPE said.

The DPE said in supporting the plan, the government had committed to mobilising the necessary resources to fund the transition, including the voluntary severance packages agreed with the unions, and to meet the minimum requirements of the Labour Relations Act and the Basic Conditions of Employment Act.

“The priorities for the DPE are now to give effect to funding commitments by the government for the business rescue plan and appoint a new and reconfigured interim board for SAA,” said the DPE.

The department said it hoped that a new SAA could reclaim market share while fighting to compete more in the emerging-market space – notwithstanding the impact of the Covid-19 pandemic, which would constrain the aviation industry for some time.

Aviation expert and SA Flyer magazine editor Guy Leitch said the restructuring could make SAA profitable again. Leitch said the right changes would address poor management and corrupt procurement.

He said SAA could do with amending some of its unprofitable flight routes. Legacy problems with unsavoury suppliers also had to be addressed. “One example was that the airline was paying R17.50 for every bottle of water handed out, but that should have cost R2,” Leitch said.