SAA to start job cuts?

[BONNIE MAD]

IKTAV wrote: ↑Thu Nov 14, 2019 6:39 am
Feral Haffajee’s article in fin24 this morning sums it up nicely.

Haffajee: Why should SAA employees pay for the sins of Dudu Myeni and Jacob Zuma?

Because I'm guessing it was about 90% of them that voted ANC and as a direct result ended up with Zuma and his band of 40 (thousand) thieves. I keep wondering when will the majority of South Africans wake up and smell the coffee!
Use the P6 program: Prior Planning Prevents P*ss Poor Performance

EXACTLY!
And if the unions had any integrity, they could have used their "power" in a positive way, to strike against the Myeni/Zuma looting, But did they?
They only start barking when the gravy train is about to de-rail.
Unions have been the downfall of many economies due to their selective amnesia.

[HJK 414]

There certainly isn't a strategy of growing into profitability at SAA.
In fact, they've dramatically downsized in the last few years, and reduced capacity while signalling the market.

In terms of shorthaul they returned 2x A320, 4x A319 and 7x B738 to lessors with no replacements.
They've reduced longhaul flying by 30%. The effect has been negligible on the bottom line due to stubbornly high fixed costs.

That is the whole point is it not ?
They have reduced the capacity and the flying routes - yet the fixed costs are still the same as before.
Even if the RASM went up by a significant amount - the overheads will simply negate the effect.

If they are at a capacity (ASM) that is 30% lower - and are saving on variable costs (A350) then the overheads (fixed costs) need to come down proportionally. And the Unions can strike all they want - but as long as the staff contingent stays as is - and the overhead stays at this level - this is a dead end street. This is not about the Executive or the Board - it is simply downsizing to a level that would make the airline sustainable at the current proportion it has.

The debt has to be paid one way or the other - the Government can solve that overnight by switching to bonds - but that is a non starter as long as the airline is incapable of getting the RASM in line with expenditure and long term fixed costs.

JK

[marius scheepers]

Feral Haffajee’s article in fin24 this morning sums it up nicely.

Haffajee: Why should SAA employees pay for the sins of Dudu Myeni and Jacob Zuma?

Because I'm guessing it was about 90% of them that voted ANC and as a direct result ended up with Zuma and his band of 40 (thousand) thieves. I keep wondering when will the majority of South Africans wake up and smell the coffee!

Never, as the majority of South Africans can barely afford a loaf of bread, so as long as the ANC is handing out food parcels then they will receive the votes and stay in power.

[IKTAV]

Feral Haffajee’s article in fin24 this morning sums it up nicely.

Haffajee: Why should SAA employees pay for the sins of Dudu Myeni and Jacob Zuma?

Because I'm guessing it was about 90% of them that voted ANC and as a direct result ended up with Zuma and his band of 40 (thousand) thieves. I keep wondering when will the majority of South Africans wake up and smell the coffee!

Yup. Can’t argue with that statement.

[MadMacs]

Ok folks, lets lay off the politics please

[IKTAV]

IKTAV wrote: ↑Thu Nov 14, 2019 6:39 am
Feral Haffajee’s article in fin24 this morning sums it up nicely.

Haffajee: Why should SAA employees pay for the sins of Dudu Myeni and Jacob Zuma?

Because I'm guessing it was about 90% of them that voted ANC and as a direct result ended up with Zuma and his band of 40 (thousand) thieves. I keep wondering when will the majority of South Africans wake up and smell the coffee!
Use the P6 program: Prior Planning Prevents P*ss Poor Performance

EXACTLY!
And if the unions had any integrity, they could have used their "power" in a positive way, to strike against the Myeni/Zuma looting, But did they?
They only start barking when the gravy train is about to de-rail.
Unions have been the downfall of many economies due to their selective amnesia.

This is the reason SAAPA took on Myeni a couple of years ago - (with OUTA’s help.) (How’s that for spine Jfairwell? )
Should have seen how well THAT went down with the other unions! But eventually, even they woke up.
And we’ll will get her... (If the friggen’ legal system stops allowing her to kick the can down the road like they always do.
The rest of the airline detests SAAPA because WE DO expose and ACT against these reprobates. But I’m starting to wonder if the legal system is not where the REAl problem lies. None of these criminals ever seems to get prosecuted and jailed!
Except for the Penny Sparrows of this world of course.

[Jfairwell]

IKTAV wrote: ↑Thu Nov 14, 2019 6:39 am
Feral Haffajee’s article in fin24 this morning sums it up nicely.

Haffajee: Why should SAA employees pay for the sins of Dudu Myeni and Jacob Zuma?

Because I'm guessing it was about 90% of them that voted ANC and as a direct result ended up with Zuma and his band of 40 (thousand) thieves. I keep wondering when will the majority of South Africans wake up and smell the coffee!
Use the P6 program: Prior Planning Prevents P*ss Poor Performance

EXACTLY!
And if the unions had any integrity, they could have used their "power" in a positive way, to strike against the Myeni/Zuma looting, But did they?
They only start barking when the gravy train is about to de-rail.
Unions have been the downfall of many economies due to their selective amnesia.

This is the reason SAAPA took on Myeni a couple of years ago - (with OUTA’s help.) (How’s that for spine Jfairwell? )
Should have seen how well THAT went down with the other unions! But eventually, even they woke up.
And we’ll will get her... (If the friggen’ legal system stops allowing her to kick the can down the road like they always do.
The rest of the airline detests SAAPA because WE DO expose and ACT against these reprobates. But I’m starting to wonder if the legal system is not where the REAl problem lies. None of these criminals ever seems to get prosecuted and jailed!
Except for the Penny Sparrows of this world of course.

SAAPA sort of acted well after the horse was bolted, the damage done - not much courage on display and not much that focuses the attention as is currently the case, yes there were many threats by SAAPA, but no real action. SAAPA may prevail against Myeni, or may not, but so what - no real life consequences.

If SAAPA really want to be useful, I suggest you get some proper lawyers and establish whether SAA has provided any financial assistance to SAX during the last two years (direct and indirect) and if indeed, you prosecute the directors in terms of section 45 of the Companies Act. Go read it yourself, but in short, the directors will be held personally responsible for such financial assistance if they have not applied the letter of the section 45 prior to providing such financial assistance - that'll focus a few minds.

[Ugly Duckling]

https://m.facebook.com/story.php?story_ ... =749558451

I am on a S.A. aviation FB page and it is bursting at the seams with talk of tomorrow's SAA workers strike, so I figured to share my aviation post on my page.
Stupidity has reached a new record breaking Low.

Mr.Rapheta and Unionists, you really are sharp business people aren't you! Forgive my blatant sarcasm, but you believe that by bringing a strike and SAA to a standstill you will save the 20% - about 1000 jobs about to be trimmed?

SAA is already bankrupt and living on Life Support and you believe that you will be helping the Airline and its employees, with a shutdown, trashing it's already diminishing and remaining turnover? Can you not figure, that by downsizing 20% and applying some qualified management, then there is a remote possibility of survival?

Rather, you will promote a strike, which will not only fail to save the 1000 imminent job losses, but it will put the entire workforce of SAA in jeopardy, with the loss of ALL/EVERY job in the airline. Right now, the employees of SAA and certainly the remaining 4000 should tripping over themselves, in their rush to fire their Union - because your union is busy blindly orchestrating the final collapse of SAA and the loss of ALL the jobs.

But, having said the above, maybe ALL South Africans should be encouraging you, as your plot will hasten the final closure of the 2nd greatest bleeding wound of the SA economy. As long as SAA is a SOE, it will remain inefficient, a cesspool for nepotism and a whirlpool for resources. SAA's decades of bail out funding is hurting our economy.

When will South Africa and all its people wake up and understand that liberation Governments are great at precipitating change, but hopeless at Governance - proven without dispute, by their having taken bastions of success and National pride and run them into the ground. SAA is a mere example of the litany of trashed SOE's - Eskom, Denel, Spoornet, Portnet..... and the list goes on. Do you dispute this? You can't, so rather all man up and get sensible, before were are all trashed.

While the 1000 jobs at SAA are in the news and very visible, what is not noticed is e.g. the huge port developments going on in Maputo (mostly by SA entrepreneurs), purely due to the shipping companies being fed up with the absolute inefficiencies (read cost to them) of Durban's Portnet. Fewer and fewer ships are calling here and with that, a deep reaching and invisible loss of jobs - much more than SAA's 1000.

I urge all SOE employees to abandon your Unions and to change your Government. While your union leaders and the agitator politicians are grandstanding and scrumming each other for TV time, your country is sinking into a whirlpool. Above all, in the workplace, be productive and take care, as if its up to you, to save your job and your company. If you are unproductive in your workplace, at whatever level, then I will have zero sympathy when your SOE/Company is no longer viable and closes down, and you are left sitting at home hungry and wondering what went wrong.

[IKTAV]

If SAAPA really want to be useful, I suggest you get some proper lawyers and establish whether SAA has provided any financial assistance to SAX during the last two years (direct and indirect) and if indeed, you prosecute the directors in terms of section 45 of the Companies Act. Go read it yourself, but in short, the directors will be held personally responsible for such financial assistance if they have not applied the letter of the section 45 prior to providing such financial assistance - that'll focus a few minds.

Thanks for the advice. Will pass it on.

[Owen]

Its about time they get rid of the dead wood, and start with SAA management,
It’s also about time the management start paying for the consequences of there actions.

[evanb]

Mr Evan, I think your assumption is wrong..................this says it all........South African Airways (SAA) has cancelled nearly all its domestic, regional and international flights scheduled for Friday, 15 November and Saturday, 16 November 2019.......SAA is very unionized, thus all the unions are talking from a position of power within SAA/SAAT.

I think you may have misunderstood what I said, and my point wasn't properly explained. An airline doesn't exist without pilots, that gives SAAPA power. Nearly every other job at SAA, maybe with the exception of cabin crew, can be outsourced. Whether it's reservations, baggage handling, cargo handing, ground handling, line maintenance, heavy maintenance, dispatch, catering, cleaning, etc.

SAAPA used their threats of strikes to actually gain concessions from SAA and government. Other unions can gain little to nothing by striking now. Other than the pyrrhic victory of actually striking, what can they gain?

[evanb]

That is the whole point is it not ?
They have reduced the capacity and the flying routes - yet the fixed costs are still the same as before.
Even if the RASM went up by a significant amount - the overheads will simply negate the effect.

If they are at a capacity (ASM) that is 30% lower - and are saving on variable costs (A350) then the overheads (fixed costs) need to come down proportionally. And the Unions can strike all they want - but as long as the staff contingent stays as is - and the overhead stays at this level - this is a dead end street. This is not about the Executive or the Board - it is simply downsizing to a level that would make the airline sustainable at the current proportion it has.

The debt has to be paid one way or the other - the Government can solve that overnight by switching to bonds - but that is a non starter as long as the airline is incapable of getting the RASM in line with expenditure and long term fixed costs.

Right, that was the point that I was making several years ago when Vuyani Jarana and Peter Davies's operational plan of cutting capacity. I argued at the time that it would canabalize revenue and that while it might be able to reduce operational somewhat it could only work if they could massively reduce overhead costs. To some extent that has happened, but it isn't a silver bullet.

[Safetyman]

Media Statement
 
SAA CANCELS FLIGHTS TO MINIMISE DISRUPTION FOR CUSTOMERS
 
JOHANNESBURG. 13 November 2019. South African Airways (SAA) has cancelled nearly all its domestic, regional and international flights scheduled for Friday, 15 November and Saturday, 16 November 2019. The airline’s key objective is to minimise the impact of disruptions for its customers.
 
The cancellations follow an announcement by the South African Cabin Crew Association (SACCA) and the National Union of Metalworkers of South Africa (NUMSA) that their members will embark on industrial action from Friday morning. This is notwithstanding SAA’s repeated overtures to the unions to acknowledge the severity of the current situation facing the airline.
 

GREAT!! Stuck in Kinshasa - Was supposed to have flown back on SAA tonight...

And you still can - strike is on Friday and today is Thursday

Hoping so - IF they do operate the flight from ORT - Kinsasa tonight, then yes. (My flight back to ORT is @ 00:30 tomorrow morning) But you can imagine the chaos in Flight Ops at the moment, so I am very nervous that this flight might not get here...

[southside]

Let's say SAA gets canned and that debt becomes due. So much debt is already due in other departments in SA? Why not get treasury to fork out 5 Billion every so often as they always do, towards that debt that can eventually be paid off without enquiring more debt and losses that SAA are currently doing on a daily basis? What is the worst case scenario if SA didn't settle it all at once?

I don't believe SAA can ever be fixed.

That way the loss making stops. Is this feasable? evanb?

[evanb]

Let's say SAA gets canned and that debt becomes due. So much debt is already due in other departments in SA? Why not get treasury to fork out 5 Billion every so often as they always do, towards that debt that can eventually be paid off without enquiring more debt and losses that SAA are currently doing on a daily basis? What is the worst case scenario if SA didn't settle it all at once?

I don't believe SAA can ever be fixed.

That way the loss making stops. Is this feasable? evanb?

Any liquidation can be managed/negotiated, but right now, if SAA had to inform creditors that they intended to voluntary liquidate the banks whose debt is guaranteed by Treasury would have an immediate claim. They would have to be paid in cash very quickly on the entire amount owed. There will be no negotiation. The challenge might be the covenants on other debt instruments by government that might be triggered by such a claim, so Treasury would likely want to avoid this situation.

The rest would be a slow process of liquidation and given that there are not many assets to sell those creditors wouldn't receive much. How much liability the Treasury would have is murky.

But there would be downstream effects. It would most certainly create a cash crisis at other SOEs and departments like ACSA, ATNS and CAA since these companies, to differing degrees, receive a disproportionate amount of revenue from SAA. The capacity will not be taken up entirely, and certainly very little in the short run.

It would also create other downstream effects in the private sector. Airlink will lose all their reservations and distribution, Comair will lose nearly a R1 billion owed to them and a bunch of technical support (the move to LHT has been slow). A bunch of foreign airlines will lose technical support in SA and the capacity will not be filled quickly.