Workers at SAA subsidiaries have called for the flattening of the airline group structure, saying the business rescue programme left the various units under it in the cold.
The seven unions are scheduled to meet the boards of the three subsidiaries, Mango, SAA Technical (SAAT) and Airchef, where they will propose the flattening of the group structure as they believe they can survive on their own.
The national carrier has been in a prolonged battle to stay afloat and has squandered numerous government bailouts over the years. Its commercial operations have been grounded since 2020 due to poor financial management and the crisis created by Covid-19.
The unions, including the National Union of Metalworkers of SA (Numsa), the SA Cabin Crew Association (Sacca), the National Transport Movement (NTM) and Solidarity have asked to meet the board chairs of the three subsidiaries to discuss the challenges faced by each entity.
Viwe James, who represents the unions, said there was a duplication of responsibilities within the SAA Group. Changing the structure of the airline would allow the subsidiaries to run on their own without financial assistance from the group. It would also ensure the challenges faced by SAA would not have a domino effect on the subsidiaries, which were previously able to “function on their own”.
They said the proposed business rescue plan is a recipe for disaster and poses a huge risk to the awaited R2.7bn from National Treasury.
The funds have been allocated to the subsidiaries as part of the R10.5bn given to the airline to implement its business rescue plan. The process to dispense the funds to the various subsidiaries is expected to be finalised in July following the passing of the Special Appropriations Bill in parliament.
Department of public enterprises spokesperson Richard Mantu said the funds allocated to the subsidiaries dispels the unions’ notion that they have been starved of funding during the airline’s rescue process. “We made it clear to all, from business rescue practitioners and all stakeholders, that the successful rescue of SAA is dependent on the survival of its subsidiaries,” said Mantu.
“There is enough room to manoeuvre under the current circumstances to rebuild all entities … using minimum resources instead of relying on handouts from government,” the unions say in a letter, dated June 1, seen by Business Day.
Though SAA exited its 16-month-long business rescue process in April, leaving the airline “solvent and liquid”, according to its rescue practitioners, the process worsened the financial challenges of the subsidiaries.
SAAT, which relies on SAA for 70% of its revenue, is undergoing a widespread retrenchment process after its revenues plunged 83% over the past year due to inactivity. Airchefs, which provides food services for the national carrier and Mango, has been unable to operate throughout the pandemic due to Covid-19 regulations on serving meals in-flight.
The future of Mango as a going concern is uncertain despite its resuming operations after its flights were abruptly suspended in April due to non-payment to the Airports Company of SA (Acsa). The low-cost airline has lost 12% of its market share in the 12 months to March 2021 to rival airlines Kulula, FlySafair, Airlink and new entrant Lift Airlines.
The airline had not responded to queries at the time of publication.
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