SAA to start restructuring process, will 1000 people lose their jobs?

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South African Airways (SAA) is facing a bleak future, as it embarks on a retrenchment process which can see approximately 1000 people losing their jobs.

On Monday, November 11, the state-owned flag carrier announced that it has notified all of its 5,146 employees it was beginning a restructuring process which can lead to job losses.

While the retrenchments will affect staff within all the SAA divisions and departments, those working in the company’s subsidiaries, such as SAA Technical, Mango Airlines and Air Chefs, are safe from the process.

Zuks Ramasia, the acting chief executive, claims SAA started with a consultation process with all its employees in line with the Labour Act.

Ramasia claims that while no final decision has been made on exactly how many people will be affected by the process, it is estimated that approximately 944 people will be affected in the end.  

Furthermore, she says SAA is hoping to minimise the impact; while offering support to those who will be directly affected by the process. She adds that over the years, SAA has faced a number of challenges.

These challenges include not only funding and liquidity; but also the inability to borrow money without repaying the debt; the volatile and fluctuating fuel prices, insufficient revenue and cash generation; as well as an ageing fleet which is too expensive to maintain.

Despite capital injections from the government, Ramasia explains the airline’s continued losses has increased the interest costs, which in turn impacts the operating cost of the business. Through the restructuring process, Ramasia says SAA is seeking to ensure effective implementation of a turnaround strategy.

Emphasising that SAA will follow necessary legalities during the restructuring process, Ramasia says SAA is taking all possible steps to ensure the process is done in a caring manner, treating everyone with respect.

As SAA embarks on this journey, what are your thoughts on the matter? Do you believe the restructuring process will save the cash-strapped airline? Share your thoughts and views with us in the comment section below.

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