Government and SAA pilots clash over retrenchment packages

The Department of Public Enterprises has launched a scathing attack on the South African Airways Pilots Association (SAAPA), accusing it of trying to milk the already ailing carrier’s resources dry.

In a statement, the department said it was concerned and disappointed that it had not dawned on the pilots that SAA’s finances are in disarray.

So far, six unions including the National Union of Metalworkers of South Africa and the South African Airways Cabin Crew Association accepted retrenchment packages.

The tug of war comes as the carrier’s business rescue practitioners Les Matuson and Siviwe Dongwana have scheduled a creditors’ meeting on Tuesday, 14 July 2020, that will decide the fate of SAA.

Pilots should accept voluntary packages

The department has called on the pilots to accept Voluntary Severance Packages (VSP) and reject their unions demands.

“SAAPA has made proposals, including to the SAA Business Rescue Practitioners, that create the optical illusion of financial savings for the airline”, the department further said.

“In reality, these proposals are motivated by greed, it transfers a financial burden to a new airline that must emerge from the business rescue process and it motivates for pilots to hold on to historic benefits at the cost of all other SAA employees”

The VSPs offered include one week calculated per year of completed service, one-month notice pay, accumulated leave paid out, the severance criteria to be calculated on a back-dated 5.9% wage increase which was agreed to in November last year, a 13th cheque and a skills development model.

The 600 SAA pilots make up 13% of SAA staff and 45% of the wage bill. The lowest of SAA’s 170 senior pilots earns R3.6-million a year, excluding perks and incentives. Of the R2.2 billion in the proposed rescue plan set aside for the voluntary severance packages (VSPs), pilots will in total get more than R1 billion.

The department also said SAAPA will likely insist on amendments of the rescue plan during the creditors’ meeting and warned that such a move would put the future prospects of SAA in jeopardy.

“The terms and conditions of employment on which SAAPA insists for pilots is still based on the premise that SAA is an internationally competitive and profitable company when in fact the airline is insolvent and in business rescue,” says the department.