SAA, unions agree to pay raise; layoffs postponed

Plans to significantly reduce South African Airways’ (SAA) workforce have been put on hold until the end of January 2020 as part of an agreement with unions to end a strike.

Union members went on strike Nov. 15, four days after SAA acting CEO Zuks Ramasia said the loss-making company would seek to reduce the 5,149-strong workforce by as many as 944 personnel as part of efforts to improve its financial situation.

The two unions involved—the South African Cabin Crew Association and the National Union of Metalworkers of South Africa—were seeking an 8% pay rise and no layoffs. The two sides eventually agreed on the 5.9% rise offered by SAA. As part of the deal, most of the planned layoffs have been “deferred” until Jan. 31, 2020, the airline said, although some 95 managerial roles are likely to be cut.

The planned pay rise, backdated to April, is scheduled to be made in two payments, in March and April 2020, but is “subject to availability of funding.”

The state-owned national airline last made a profit in 2011 and has been kept afloat in recent years by a succession of cash injections from the government. But South African public enterprises minister Pravin Gordhan told the unions last week that while the government remained committed to saving the airline, it could not extend further financial assistance to it.

“Over the last three years the government has provided more than ZAR20.5 billion [$1.4 billion] of fiscal support to SAA. No further financial resources can be advanced to the carrier,” he said. “The government is facing severe fiscal constraints. Even if there were funds available, there is no legal mechanism to provide funding to SAA in the current year. The funds that government has committed to provide over the next three years have been earmarked for the repayment of SAA’s outstanding debt.”