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Reuters reports that South African Airways (SAA) has nearly no cash left and might miss salary payments this month, even as a crippling six-day strike has pushed the state-owned airline to the brink of financial collapse.
SAA board member Martin Kingston said the strike was costing the airline a minimum of R50 million a day and that, without additional state guarantees, the board could have to recommend that the company be liquidated. “We may not have enough cash to pay salaries at the end of the month. We are still investigating how we can do that. This is a real-time discussion we are having with National Treasury and the Department of Public Enterprises. We need help imminently,” he warned. Compounding the cash squeeze, the National Union of Metalworkers of SA (Numsa) and SA Cabin Crew Association (Sacca) called a strike last week after SAA refused their demand for an 8% salary hike and announced it planned to cut almost 20% of employees. SAA has offered a 5.9% increase. Another large union, the National Transport Movement, is considering whether to accept that offer. Meantime, Numsa has issued catering firm Air Chefs, a subsidiary of SAA, with a letter of intent threatening a secondary strike and has secured a strike certificate over a separate issue at British Airways franchise partner Comair. The standoff between SAA and the unions is a critical test of President Cyril Ramaphosa’s pledge to fix ailing state firms. But the government has few easy options to rescue SAA. The airline has received more than R20 billion in bailouts over the past three years and is hobbled by an unprofitable route network and a fleet of inefficient planes.
- Read the full original of the report in the above regard by Alexander Winning and Emma Rumney at Moneyweb
- Read too, Gordhan says SAA may have no money for salaries this month, at Fin24
Get other news reports at the SA Labour News home page