This is according to a report from Rapport, which noted that this proposal was contained in a notification sent by SAA’s business rescue practitioners (BRPs) Les Matuson and Siviwe Dongwana to unions representing the airline’s employees.
The BRPs earlier this week confirmed that the conditions for business rescue of the struggling national carrier had been met.
This followed SAA’s stakeholder – the Department of Public Enterprises (DPE) – announcing earlier in July that it had committed to funding the creation of a new airline.
A projected R10.1 billion will be required to fund the rescue plan and address several requirements:
- Clean up and stabilise SAA’s balance sheet.
- Restructure the company.
- Provide working capital.
- Build a stable platform for a new national airline.
The restructuring of SAA will also include 2,700 employees being issued with severance packages that meet the minimum requirements of the Labour Relations Act.
How pilots will be affected
As part of the restructuring, SAA’s current complement of 625 pilots will be slashed to 88.
More than R1 billion of the R2.2 billion set aside for voluntary severance packages will go to these retrenched pilots.
Those who are retained will earn an annual salary of between R950,000 and R2.1 million, with a a 20% premium included for flying certain planes.
According to the DPE, senior pilots in the lower ranks currently earn R3.6 million without benefits and incentives.
In terms of the selection criteria, SAA wants to use a “first-in-first-out” approach, which benefits employees with longer years of service. This will be subject to the relevant skills, qualifications, and experience for the position.
However, the airline has included that an equal employment veto be used to ensure reasonable representation for black, female, and disabled employees, in order to address historical imbalances.
Trade union Solidarity’s representative for the airline industry Derek Mans believes applying criteria other than seniority is discriminatory, and has said the union will challenge the proposal.
The exact retrenchment criteria will be determined during consultations led by the Commission for Conciliation, Mediation, and Arbitration (CCMA), which are set to start on 11 August, Mans indicated.
Private funding must be used
The DA went as far as to file a case in the High Court aimed at preventing Mboweni from using government money to fund more bailouts.
Mboweni said that the announcement of government’s commitment noted that it would “mobilise” funds for SAA, not provide them, however.
He laid out several options for raising the funds, including seeking money from “strategic partners” or private equity, as well as tapping pension funds and approaching global financial institutions.