November 15, 2019 / 7:08 AM / 23 days ago

South Africa's SAA workers start strike that could cripple airline

JOHANNESBURG (Reuters) - South African Airways’ future is hanging in the balance after its workers went on strike on Friday to demand higher wages and protest planned job cuts, forcing the struggling state-owned carrier to cancel all flights.

SAA, which has not turned a profit since 2011 and is without a permanent CEO, says the walkout by unions representing more than half of its workforce will cost it 50 million rand ($3.36 million) per day and threatens its survival.

The unions rejected SAA’s revised wage offer late on Thursday, and are also striking over the carrier’s plans to cut more than 900 jobs in a bid to stem financial losses and end a reliance on state bailouts.

SAA’s acting chief financial officer, Deon Fredericks, told the eNCA news channel that the airline, hurt by past mismanagement, could not just close its eyes and carry on.

“We’ll just go deeper down,” he said.

SAA is currently trying to negotiate funding from banks it needs to stay afloat. Fredericks said the airline would not survive without the money, and the financial impact of the strike could jeopardize the talks.

Its woes mark a dramatic fall from grace over the past decade, which has seen the carrier lose its place as Africa’s biggest airline and become a source of frustration for taxpayers who have forked out more than 30 billion rand (1.7 billion pounds) since 2012 to keep it in the air.

The National Union of Metal Workers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA), who called the SAA strike, said the action will continue until their demands - including an 8% wage hike and job security - are met.

NUMSA spokeswoman Phakamile Hlubi-Majola said the unions did not believe management’s warnings of possible collapse, and the airline’s problems were a result of their repeated failures.

Workers of South African Airways (SAA) hold placards during a strike over wages and job cuts at SAA headquarters in Kempton Park, South Africa, November 15, 2019. REUTERS/Siyabonga Sishi

“WHERE IS THE MONEY?”

SAA extended its cancellation of domestic and regional flights from Saturday to Monday, saying passengers would be accommodated on its sister airlines Mango and Airlink.

It said it was aiming to operate most of its international flights departing from Johannesburg’s O.R. Tambo International Airport from Sunday, adding that inbound flights from London, New York, Washington, Munich, Frankfurt and Hong Kong were set to operate from Monday.

While some passengers told Reuters the airline had made alternative arrangements for their travel, others were left unsure how they would get to their destinations.

Vicky Mojela, 26, had been due to catch a flight to Uganda to attend wedding celebrations. She was told there were no direct or connecting flights.

“I’m disappointed,” she said. “I just hope it doesn’t happen again.”

At SAA headquarters near OR Tambo international airport in Johannesburg, hundreds of workers gathered on Friday singing protest songs and holding placards reading “Flights are full, where is the money?” and “We are not fools”.

Cabin crew member Olwetu Mrwetyane, 36, said her 11 years at SAA have been marked by job insecurity.

“Even now we don’t know if we’re going to have a job,” the mother of two said, adding she would be left destitute if she was laid off.

Slideshow (4 Images)

SAA’s problems highlight the scale of the challenge facing President Cyril Ramaphosa, who has staked his reputation on turning around a number of ailing state-run firms that threaten the recovery of a stagnant economy.

Many have been left in dire financial straits after years of mismanagement and poor governance, and need to restructure. But job cuts are a hugely sensitive issue in South Africa where unemployment is close to 30%.

Additional reporting by Mfuneko Toyana; Writing by Emma Rumney; editing by Olivia Kumwenda-Mtambo and Emelia Sithole-Matarise

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