SAA agrees deal to end eight-day strike

Airline says it will restore a full flight schedule in stages over the weekend.
Unions agree to a 5.9% wage hike retroactive to April, to be paid from next February if sufficient funds were available, SAA says. Image: Moneyweb

South African Airways (SAA) signed a wage deal with trade unions on Friday to end an eight-day strike that brought the cash-strapped state airline to the brink of collapse.

SAA said it would restore its flight schedule to normal over the weekend and promised to delay talks with unions on job cuts until the end of January.

Three of SAA’s largest trade unions agreed to a 5.9% pay rise for the financial year that began in April, with the first salary increase in February 2020 and back payments in March and April if the airline has sufficient funds.

That was a similar deal to the one offered before two of the unions launched a strike on Nov. 15, making it a victory for SAA and government officials trying to curb steep financial losses at the airline. Some airline staff had returned to work during the strike as they were not paid while out on industrial action.

The South African Cabin Crew Association (SACCA) and the National Union of Metalworkers of South Africa (NUMSA), the unions that led the strike, had pushed for an 8% salary increase.

Workers belonging to another union, the National Transport Movement, which didn’t participate in the strike, will receive the same 5.9% increase.

“We are therefore pleased to announce that we are calling off all strike action at SAA and SAAT (South African Airways Technical) with immediate effect, due to the fact that we have settled on a wage offer,” the unions said in a statement.

SAA said it would operate a near normal flight schedule on Saturday and a full schedule on Sunday.

The strike had cost the airline about R50 million a day.

South African President Cyril Ramaphosa has made turning around ailing state companies such as SAA a priority as he tries to revive economic growth and steady the country’s public finances after a ruinous decade under his predecessor, Jacob Zuma.

He has found it hard to make much headway, given fierce opposition from unions and a broad cross-section of society that is deeply suspicious of moves that could weaken the hand of the state in the economy.

But there have been some signs recently that officials are starting to take a tougher line on loss-making state entities.

Public Enterprises Minister Pravin Gordhan said this week that the government could provide no more financial support to SAA, after more than R20 billion of bailouts in the past three years.

SAA has pleaded for the government to sanction more state guarantees to allow it to unlock new bank loans, but so far those guarantees haven’t been forthcoming.

Earlier this month SAA said it could cut almost 20% of its 5,000 employees.

Investors and ratings agencies want to see evidence that the government is serious about tackling runaway spending.

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COMMENTS   28

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As per my comment to the previous story –

“CAPITULATION – yet again Govt lacks the b*lls to take a meaningful stand…

SAA does not have the money for even a 0.0001% increase. When will people be taught the lesson that you don’t always get what you demand, toi toi and strike for. Pavlov’s dog is yet once again conditioned…”

So what is the level of settlement?

According to new 24 they accepted the original 5.9% and are negotiating future increases. There is no limit to human stupidity.

All BS. Predictable. They are all in cahoots.

Lets hope the “Business Rescue” or Liquidation can put a stop to this insanity.

You make a deal but have no money to pay for it. Wow. That makes a lot of sense.

Not at all. The govt is busy injecting another 2bn into SAA to keep them rolling for another 2 months….and then comes bucket loads more. With kicking and screaming of course. But it will come.

And that’s so the unions can get their backdated increases. The ANC always supports their narrow base at the expense of the whole country.

Did Cyril, Pravin and Tito give in ?
Or did the Executive force them to accede to Union demands ?

Squirrel hasn’t got any nuts

We will give with this hand but the other is empty, so November little or no pay and even worse in December.

I will bet my bottom dollar that a lot of SAA customers are not going to take a chance and even book on SAA. They will stay with the carrier that ferried them around this last week.

Employees should not pay for Management’s mismanagement haha.

I’m all for the increase. If it will mean a sooner end to SAA then so be it.

“SAA on Friday said the unions had agreed to a 5.9% wage hike retroactive to April, to be paid from next February if sufficient funds were available”

LOL and the trade unions actually believe there will be money?

Can someone explain how it went from imminent retrenchments to overall pay increases??

Easy. There’s another bailout on the way

Fully agree….bailouts have been keeping SAA in the air for a few years running.

….I fear that the ripple effect of such bailout will reach the upcoming Feb 2020 Budget Speech. I’ll be bracing for impact & closing the hatches 🙁

@Agent Smith.. I dont know your voice but i imagined it when read that

I think two things led to capitulation.

1. The anti Ramaphosa section of the ANC used the strike to threaten sly Cyril’s leadership and he was scared to put it to a vote.

2. MP’s (maybe even Gordhan et al) realised that if SAA folded there would be a loss of free flights and their cadre chums and tenderpreneurs would not be paying them Xmas bonuses to them and the ANC machine.

Venal to the last.

Oooohhh!!! 8 days. Wow. Way to hold out for nothing.
Next time, they can contact me. I’ll teach them about negotiations. Here, “no”. See? Easy.
Or as Harvey MacKay said, “Smile and say no until your tongue bleeds”.

Even just reading this brief report, it is plain to see there is no deal. It is a settlement that allows the union to save face:

Note:
“SAA on Friday said the unions had agreed to a 5.9% wage hike retroactive to April, to be paid from next February if sufficient funds were available.”

Thee won’t be any funds available next February.

“Consultations on planned job cuts have been deferred until Jan 31, it said.”

Can kicked 2 months down the road.

Ah well…
There goes the lesson that I hoped the ANC would have learnt.

At least their hands are still tied. They cannot give a bailout or the Moody’s hammer will drop.
So they have to cut costs by cancelling the dodgy contracts.

Can anybody verify this:
I have heard rumours that SAA is paying more for fuel than what a private pilot would pay because of all the middle men and cadres in the gravy train…
Is this true?

Apparently only 25% of fuel is supplied by non-oil majors but rather a small tenderpreneur. The rest is directly from the local oil refiners.

The issue is that refined jet fuel can be imported cheaper than it can be purchased from the local refiners. South African refining costs are high and the infrastructure is not well maintained.

The tenderpreneur rather than importing the fuel himself just acts as a middleman between TOTAL South Africa and SAA. Businessday had a nice article focussing on the background of this middleman who is a local music producer. SAA had some hedging losses when they hedged the oil price at a higher level before the shale oil exploision. I am not sure as to where this forward book is sitting now as for the last 2 years there has been no financials.

Well they pay 3 times what you and I buy bottled water for so very likely they are over paying for fuel. After all it is the second biggest ATM after Eskom in the country.

“ retroactive to April”

therein lies the rub

This is much more important than SAA. I think the strike was a warning shot from Cosatu and the SACP. Remember they are vital to Cyril. That they walked away winners from this tells us that the likelihood of shrinking or at least containing growth of public sector spending is zero.

Slowly but surely we are heading to an IMF bailout or an inflationary spiral

Workers will return, but will the passengers return?

but Numsa said they got 8%..anyway Pravin the sosialist can’t run the SOE’s..now lets wait for the business rescue court case.

SAA is not a going concern. Trading is illegal!

Aye and I imagine some big suppliers must be getting twitchy.

After almost completing 3 international qualifications over the past few years my white ass won’t even see an inflation increase.

End of comments.

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