SOUTH AFRICA (Quartz Africa) – Pilots and cabin crew from South African Airways will be loaned to other airlines, as the debt-ridden national carrier tries to save itself.
The airline’s CEO Vuyani Jarana told news agency AFP this week that it was part of his cost-cutting scheme to save South African Airways. Jarana hopes that South Africa’s underused pilots can take advantage of the global pilot shortage, instead of having to lay off staff.
A South African pilot who has since been contracted out to Japan Air was offered a lucrative salary in US dollars and a business class flight home every three weeks. The South African Airlines pilots association, however, said it was “dismayed” that its members would have to be contracted to airlines like Emirates, Turkish Airlines and Cathay Pacific “as a result of extremely poor fiscal control and mismanagement.”
“It is unsettling to talk about job losses in a country that is battling high levels of unemployment. We would like to see a sustainable SAA,” said Werner Human, COO of the trade union Solidarity.
The union has approached the courts to compel the government to place SAA under business rescue, which could force the company to restructure and undertake any other means to save it from its current financial distress. The union also wants parliament to stop bailing SAA out.
South Africa’s labor laws are often seen as advantaging workers, but has sided with South African Airways in previous retrenchment suits. Earlier this month, the carrier decided to lay off catering staff, but have yet to decide how many workers to let go of. The effort by the state-owned company to avoid layoffs could be political, with South Africa heading to an election year in an environment with already high unemployment.`
The airline received a 3 billion rand (nearly $217 million) bailout in September last year to prevent a default and asked for an additional five billion rand (more than $360 million) this year. Jarana took over SAA in November last year and launched a three-year rescue plan that also includes reducing routes and the axing of its CFO and CEO.
South Africa isn’t ready to give up on its flag carrier just yet, especially not in an environment that has seen Ethiopian Airlines thrive and Kenyan Airways cautiously raise its ambitions as South African Airways loses ground.
“The African travel market is increasing despite the challenges of SAA so if there’s growth in the market, it says that there’s an opportunity for all of us to participate,” Jarana told a South African radio station. “I think if we fix ourselves internally SAA will have a chance to participate.”
The national carrier is just one of South Africa’s embattled state-owned enterprises.