Pravin Gordhan: This is why government will not bailout SAA in 2019/20

Public Enterprises Minister, Pravin Gordhan, will feel that he has tried his utmost best to talk some sense into the defiant Irvin Jim and Zazi Nsibanyoni-Mugambi, and made them see that carrying on with the SAA strike was a futile exercise.

SAA strike: What is the latest?

The negotiations between SAA and trade unions, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca), has hit a brick wall and the strike is on its fifth day.

The airline, however, has battened down the hatches and resumed service with some of the protesting workers returning to their posts.

SAA made it clear that all they can offer is an across-the-board 5.9% salary increase from March 2020, and that is on the condition that funds have been made available to them.

According to the airline’s spokesperson, Tlali Tlali, this counteroffer has been rejected and instead, the unions have submitted more demands.

“The company has decided to approach the labour court on an urgent basis to interdict these demands, which are not procedural and also to address the non-compliance with picketing rules,” he said.

SAA also noted that it has measures in place to protect workers who have been subjected to threats and intimidation for returning to work.

The two parties were expected to sit down for mediation talks with the CCMA, on Tuesday afternoon. The outcomes of the meeting have yet to be communicated.

Pravin Gordhan paints the real picture of airline’s finances

On Wednesday morning, the Ministry of Public Enterprises issued a statement, detailing the outcome of the meeting Gordhan had with Numsa and Sacca.

The ministry’s spokesperson, Sam Mkokeli, noted that the subject of the meeting was not about finding a resolution towards the unions’ demands, as this is “being handled by the SAA management team.”

“While the Minister reiterated the government’s commitment to saving the airline, he strongly urged the unions to work with the airline’s management to find a speedy resolution to the impasse. The ultimate aim is to ensure that both jobs and the airline can be saved,” Mkokeli said.

In essence, Gordhan made it clear to the unions that SAA is looking to the government for money and Treasury is not in a position to approve any further bailouts sought by the airline. At least, not in this financial year.

“Over the last three years, the government has provided more than R20.5 billion of fiscal support to SAA. No further financial resources can be advanced to the carrier. The Government is facing severe fiscal constraints.

“Even if there were funds available, there is no legal mechanism to provide funding to SAA in the current year. The funds that Government has committed to provide over the next three years have been earmarked for the repayment of SAA’s outstanding debt,” Gordhan explained.

He urged Numsa and Sacca to return to the negotiation table with a little more willingness to work with SAA in mapping a constructive way forward for all parties involved.

After all, the airline has set a ‘no-work-no-pay’ policy in place for workers who remain on strike for seven days.

This is why government will not bailout national carrier

Gordhan was frank in stating that, in the end, SAA has no other choice but to initiate its restructuring program, which may threaten hundreds — if not thousands — of jobs.

Already, the airline has found a way to shave off more than R500-million from “renegotiating procurement contracts, many of which were concluded at inflated prices during the era of state capture.”

“More effort is required to respond to the cash shortfall that the airline is experiencing in this financial year. Unfortunately the strike is not helping as it exacerbates the financial crisis and might put the airline in a precipitous position,” the statement concluded.