The Department of Public Enterprises (DPE) has vetoed additional demands by the South African Airways Pilots Association’s (SAAPA) as part of the airline’s business rescue proceedings.
The DPE said that the pilots are seeking benefits, which “are far more costly, more lucrative and financially rewarding for the pilots than any other class of employees at SAA”.
“For example, in the latest Voluntary Severance Packages (VSPs), the 600 SAA pilots make up 13% of SAA staff, and they consume 45% of the wage bill,” it said.
“The lowest of SAA’s 170 senior pilots earn R3.6-million a year, excluding benefits and incentives. Of the R2.2 billion proposed budget for the VSPs, pilots will get more than R1 billion.
The DPE claimed that SAAPA proposed the following:
- Retrenching 1 548 employees and retaining 3,099 employees – 2 000 for the start-up of the new airline, 435 on a temporary layoff scheme, and 664 on furlough (furloughed employees are retrenched but can be called in as required);
- Reducing the number of retrenched employees from 3 647 to 1 548, excluding the 664 on furlough. This means the total cost of SAAPA’s proposal would be R1.986 billion against the budget of R2.2 billion that DPE had proposed to fund its proposal;
- Retained workers be kept on a part time basis of 75% and be paid accordingly;
- Further cut in salaries of the pilots (20%) and employees 10%;
- Improved VSP to incentivise senior pilots;
- Provide opportunities to the younger and in particular, formerly disadvantaged pilots to advance their careers.
The DPE said it does not believe that the SAAPA proposal is in the best interest of SAA, its employees, creditors and other stakeholders and has informed SAAPA that its proposal would exacerbate a prolonged economic recovery in a post Covid-19 era.
“SAAPA’s proposals seek to retain a much larger number of employees – in particular, more pilots – in a new, restructured, viable and competitive airline that must emerge from a business rescue process for SAA.
“These purport to be affordable now, when in fact they would cause the base costs of starting a new airline to be substantially higher, unaffordable and unsustainable.
“What SAAPA fails to recognise and accept is that the terms and conditions of employment of the pilots is still based on the premise that SAA is an internationally competitive and profitable company.”