Strategic Equity Partner Still the Way to Go as SAA Signs a Deferred Wage Deal – FEDUSA
22 November 2019
While the Federation of Unions of South Africa (FEDUSA) welcomes the end of a crippling, week-long South African Airways (SAA) strike that was costing the cash strapped national carrier an estimated R52 million a day, the fact remains that although the 5.9% wage increase has been backdated to 1 April 2019, it will only be paid out in February 2020 because SAA does not have that kind of money at present; or perhaps more accurately, if it can find the money by then.
This tough wage settlement validates the union federation’s call made earlier this week on government and especially Public Enterprises Minister Pravin Gordhan to take the unpopular but vital step of bringing in a strategic partner that will help to recapitalize SAA and save it from actually winding down and retrenching thousands of workers including those who did not take part in the strike that hit the airline on Thursday last week.
The partial privatization of such a high profile state owned enterprises will obviously be met with fierce resistance from the ruling party’s Alliance partners and other trade unions in general, but this is arguably the only viable option for a national carrier that has chalked up billions of rands in government bailouts following years of governance failure and cronyism, is bankrupt, needs to find R2 billion to survive to the end of the financial year in about two months’ time; in addition to meeting union demands of an 8% wage increase. The unions have not only rejected the airline’s 5.9% offer, but they have now made it clear that their fight is no longer just about wages but includes protecting more than 900 jobs that management has said are on the line.
All indications are that this is a moment of truth for all parties involved given that Finance Minister Tito Mboweni made it clear during his second Mini Budget last month that the time for free government cash injection is over; and financially stressed state owned enterprises will have to apply for a loan, that must be paid back, going forward. Even more unsympathetic was the statement attributed to Minister Gordhan by AFP last week when he addressed investors in New York, after hearing about the strike, that unlike Eskom, SAA was not too big to fail.
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Acting President FEDUSA
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Johan van Niekerk
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FEDUSA Media and Research Officer
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Email: research @fedusa.org.za