The South African government signalled it\u2019s going to take a hard-line approach to cash-strapped South African Airways (SAA) as labour unions prepared to strike over pay and job cuts, forcing the carrier to cancel almost all its flights over the next two days.<\/p>\n
\u201cIf some tough decisions need to be made, we\u2019ll make them,\u201d said public enterprises minister Pravin Gordhan in a speech at a conference in New York Thursday. South African Airways is \u201cnot too big to fail\u201d.<\/p>\n
Two unions representing more than 3,000 staff at SAA have said they\u2019ll go on strike Friday to protest the carrier\u2019s failure to meet their pay demands and plans to fire 944 employees.<\/p>\n
The two sides held last-minute talks Thursday in an effort to make a deal, but the labour groups rejected an offer and the walkout will go ahead.<\/p>\n
The government will repay loss-making SAA\u2019s outstanding government-guaranteed debt of R9.2 billion ($620 million) over the next three years, the National Treasury said in the medium-term budget policy statement in October. Lenders are demanding a firm repayment plan as a condition for agreeing to extend more funding, SAA has said.<\/p>\n
The airline, which has lost more than R28 billion over the past 13 years and relies on financial support from the government to remain solvent, says it has no option other than to restructure or place the entire business at risk.<\/p>\n
The unions counter that their members shouldn\u2019t have to pay the price of years of mismanagement and misappropriation of the airline\u2019s funds, and that alternative solutions need to be sought. South Africa\u2019s jobless rate is more than 29%, the highest in at least 11 years.<\/p>\n
The state is talking with potential investors in the airline to ease the continuing burden the company puts on the national budget.<\/p>\n
\u201cI am pleased to learn that there are conversations involving South African Airways and potential equity partners, which would liberate the fiscus from this SAA sword of Damocles,\u201d Finance Minister Tito Mboweni said last month.<\/p>\n
Some of the unions are politically motivated, Gordhan said.<\/p>\n
\u201cThey\u2019re risking the future of the airline and the jobs of everybody else,\u201d he said \u201cHopefully they come to their senses before we go too far.\u201d<\/p>\n
SAA said it will apply a \u201cno work no pay\u201d principle to those who participate in the strike.<\/p>\n
While the carrier cancelled all domestic, regional and international flights scheduled for Friday and Saturday, partner airlines including Mango, SA Express and Airlink will continue to operate, it said.<\/p>\n
\u201cThose who participate in the strike action will not be permitted back to work until the strike is over,\u201d said Martin Kemp, SAA\u2019s acting general manager for human resources.<\/p>\n
\u201cThe rest of the employees who report for duty will be allowed to work.\u201d<\/p>\n