NUMSA and SACCA welcomes funding for SAA
3 February 2020
The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) welcome the funding of R3.5 billion for South African Airways (SAA) which was received from the Development Bank of South Africa (DBSA). This money is working capital for the airline which is expected to help with operational expenses until the end of February.
The funding has been criticized by some because of the many bailouts which SAA has received in the past. We do not want an SAA which is dependent on bailouts. We want an SAA which is viable. But if SAA collapses ten thousand workers and their families will suffer because of job losses, and we know that on average, workers support between five and seven extended family members, which means up to seventy thousand people may be affected. This is against a backdrop of extremely high unemployment, inequality and poverty and a stagnating economy. It would be extremely reckless and negligent for this government to allow SAA or any other State Owned Entity (SOE) to collapse. Workers should not be expected to suffer job losses because of the corruption, mismanagement and looting of the board and the executive management of SAA. There have been no consequences for the board and executive management of the airline for their role in the collapse of SAA.
This is why we urge the Business Rescue Practitioner to speed up and intensify the work of cancelling, re-negotiating and/or insourcing contracts which are a financial burden on (SAA). The airline is under business rescue in part because it spends R25 billion on procurement per year. Some of these are ever-green contracts, with grossly inflated pricing and there has been no intervention on these contracts which are choking the airline. This urgent intervention will go a long way to making the airline more sustainable in the long term. This was the work which NUMSA and SACCA had been driving as part of the Task Team at SAA, prior to it being placed under Voluntary Business Rescue.
We have seen positive results from this at SAAT through a clean-up in the procurement department. NUMSA has been working to identify erroneous contracts, and unpaid invoices to the value of approximately R102 million by third party customers for services rendered to SAAT. We also recommended insourcing a warehousing contract to save costs and this also had a positive impact at SAAT. This work is ongoing and we expect to assist in realizing even more cost savings. This is the work which the SAA board has consistently failed to do which is why we keep calling for their removal, because they are incapable of executing their fiduciary duties. They have demonstrated that they are not interested in saving the airline and turning it around. As long as they remain in their positions, the Business Rescue process remains under threat. We do not want this money to go to waste. We urge the President to ensure that the SAA board is dissolved with immediate effect.
We will be meeting the Business Rescue Practitioner again this week and formal engagement on salaries and the restructuring plan will also be taking place.
Issued by Phakamile Hlubi-Majola, NUMSA National Spokesperson, 3 February 2020
