The SA government may struggle to meet the additional demand of the SAA pilots. The government said on Friday it was concerned pilots at troubled national carrier SAA were seeking benefits which were much higher than those of other employees, and signalled it was not prepared to grant them.
Earlier this week the department of public enterprises (DPE) said the National Union of Metalworkers of South Africa and the South African Airways Cabin Crew Association had finally agreed to a severance package structure at the airline which went into business rescue last December, but the South African Airways Pilots Association (SAAPA) remained recalcitrant.
It said the agreement reached on Tuesday at a labour consultative forum gave momentum to the adoption of a business rescue plan by creditors who will vote on the issue on July 14.
On Friday the department said SAAPA had endorsed the voluntary severance packages but wanted benefits “far more costly, more lucrative and financially rewarding for the pilots than any other class of employees at SAA”.
In the latest package proposals, the 600 SAA pilots make up 13 percent of the airline’s staff but consume 45 percent of the wage bill, with the lowest of the 170 senior pilots earning R3.6 million a year, excluding benefits and incentives.
Of the R2.2 billion proposed budget for the voluntary severance packages, pilots will get more than R1 billion.
SAAPA’s proposals, the public enterprises department said on Friday, would reduce the number of retrenched employees from 3 647 to 1 548, excluding 664 on furlough, with the total budget dipping to R1.986 billion from R2.2 billion.
Retained workers would be kept on a 75 percent part time basis and be paid accordingly, with a 20 percent further cut in pilots’ salaries and 10 percent for other employees. The voluntary severance package for senior pilots would be improved as an incentive and opportunities would be provided for younger, formerly disadvantaged pilots to advance their careers.
“The DPE does not believe that the SAAPA proposal is in the best interest of SAA, its employees, creditors and other stakeholders and has informed SAAPA that its proposal would exacerbate a prolonged economic recovery in a post Covid-19 era,” the department said, referring to the coronavirus crisis which has exacerbated the national carrier’s financial woes.
It said SAAPA’s proposals would cause the base costs of starting a new airline to be substantially higher, unaffordable and that the government had informed the pilots’ association that the government would not “accede to any further unreasonable and greedy demands from sections of union leadership for additional benefits”.
The public enterprises department is urging creditors to vote in favour of the SAA business rescue plan on July 14, warning that failure to achieve the required 75 percent minimum approval would result in the protracted and costly liquidation of the airline.