NOMPU SIZIBA: South African Airways leadership briefed the parliament standing committee on public accounts, as it has to account for why it had failed to table its 2018/19 annual report. It indicated that the Auditor-General, Kimi Makwetu, had expressed reservations about whether it could continue to be recognised as a going concern, which meant it would make it very difficult for the airline to access the cash it needs from funders. A question has therefore been raised about whether SAA can afford its turnaround strategy, which includes the axing of some 944 personnel.
In the meantime, the unions – among them Numsa – have threatened to bring SAA to an indefinite standstill come Friday [November 15] if their demands are not met. On this platform yesterday, SAA warned that such action could see the airline shut down for good. Unions are demanding wage increases of 8%, citing that airline pilots got an increase of 5.9% on a higher-based salary. And, of course, the unions are totally opposed to the proposed job losses.
To get some views on the latest developments I’m joined on the line by Professor Jannie Rossouw, the head of the School of Economic and Business Sciences at Wits University. Thanks very much, professor, for joining us. Apart from the job cuts that South African Airways are planning, what other issues are they are looking at to deal with in terms of their restructure process?
JANNIE ROSSOUW: In terms of the restructure process, SAA will have to look at its whole cost structure. And of course, one of the objections of the trade unions is that the executive of SAA has not been trimmed down. That might well be a valid argument – that the trimming should be all over the structure of SAA, and not only in the lower ranks.
NOMPU SIZIBA: Yes, indeed. To your mind, and based on what South African Airways had to say at the portfolio committee today [Wednesday, November 13], where they said that because the Auditor-General is not really certain whether he can describe them as a going concern, making it difficult for them [the airline] to get money externally to run their operations and do whatever else they need to do, do you get the feeling that it’s going to be very difficult for them to actually implement that turnaround strategy?
JANNIE ROSSOUW: Yes, indeed. It’s really a question of whether SAA is still a going concern. It’s shocking that their financial statements have still not been published, so it’s not possible for anybody to assess that question at the moment. But I know Solidarity has asked for billions to rescue SAA. I asked five years ago, and I’ve been asking all the time, that the government should simply give SAA away to anybody who wants it, because the government has really made a mess of it.
NOMPU SIZIBA: Let’s talk about more immediate matters. Things are getting quite hot now, with the unions coming out today at a press conference, saying that, come Friday, if their demands are not met – one of them being a wage increase of 8% – which of course must be very difficult for SAA, given their financial predicament, they will go on strike. And of course, on top of that, they completely object to those 944 job losses.
If they do that, and they say it’s going to be an indefinite strike, what’s your sense about what will happen to the airline?
JANNIE ROSSOUW: Probably the end of SAA. The airline will simply have to close and all the jobs at SAA will be gone. So there is no possibility of keeping SAA open as a business if the unions go on an indefinite strike. Effectively, unions will be closing SAA. And in the process, I must add, doing South African taxpayers a huge favour because SAA has been flying at the expense of the taxpayers for many years.
NOMPU SIZIBA: What moves can government make at this stage?
JANNIE ROSSOUW: Government can take the initiative and give SAA away. Government can decide to close SAA and just lay off all the staff. An 8% salary adjustment is in any case not justifiable in an environment with an inflation rate of 4.5%. So government can decide to do the right thing and just close SAA. It should have done that five years ago.
NOMPU SIZIBA: We’ll watch this space. Easier said than done, I’m sure. Thanks very much, professor.