South African Airline Negotiates Deal With Striking Workers

South African Airways has experienced financial difficulties for years. (Wikimedia Commons)

South African Airways (SAA) reached a deal to end a large-scale strike by its workers after a week of negotiations. The strike started on November 15 after unions representing the majority of the state-owned airline company’s workforce refused to accept proposed plans to fire just under a fifth of current employees and implement a less-than-expected wage increase. The airline managed to end the strike without raising the initial offer of a 5.9-percent wage increase. 

For the past decade, SAA has suffered under mounting debt and frequent accusations of financial mismanagement. The airline lacks stable leadership and has failed to turn a profit since 2011. The company’s financial woes could result from a system in which many components of the airline’s operations, including security, baggage loading, and in-flight meals, are contracted through labor brokers that underpay workers while overcharging the airline.

Soon enough, frustration over these shortcomings boiled over, prompting two unions, the National Union for Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) to announce a strike that resulted in the cancellation of nearly all flights scheduled for November 15 and 16.

Talks took place between SAA and union leadership, as well as Minister of Public Enterprises Pravin Gordhan. Initial discussions between the unions and airlines proved difficult, but on November 22, it was announced that NUMSA and SACCA would accept the low wage increase.

As a result of the strike, SAA released a public statement on November 18 saying that flights to six regional destinations would resume, but many domestic flights would be canceled. The grounding of most SAA flights cost the airline approximately $3.3 million dollars per day. 

Because budget constraints initially triggered the company’s planned layoffs and wage stagnation, the compounding effect of flight cancellations has sparked concerns that SAA may soon collapse. As a result, some have suggested private management as a possible means to resolve the airline’s woes. 

One union has filed a court case to install a business rescue practitioner to return the airline to normalcy. This is not the only case of unprofitable public firms in South Africa; budget deficits and an ever-increasing national debt have forced the government to consider substantial reforms to state-owned businesses to cut expenditures.