01/07/09, 17:41:40 UTC

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More than 2000 South African airline jobs could be on the line

cnn.com

JOHANNESBURG - South African Airways (SAA) said today it could eliminate more than 2,000 jobs as part of a restructuring programme aimed at cutting costs.

The government-owned airline plans to save a total of 638 mln rand, which equates to about 64 mln eur, in operating costs under the programme, which calls for 'grounding the fleet of Boeing (NYSE:BA) 747-400 aircraft, reviewing the route network and re-negotiating supplier contracts', the national carrier said in a newspaper advertisement.

Dismissals have already been issued to management employees and many more could follow if negotiations on revised agreements and employment conditions fail.

'It is widely acknowledged that SAA is overstaffed, notably at the management level, and a decision was taken to reduce this level by 30 percent,' SAA general manager of human resources Bhabhalazi Bulunga wrote in the business report.

'This is well on track, and a total of 223 managers will leave SAA in the coming months. A further 711 employees will be affected by various initiatives being implemented, such as the grounding of the B747-400's...,' Bulunga said.

The company, which employs more than 10,000 people, said some of the work packages that were a 'legacy of the national carrier's past' were 'highly onerous' and profitable only to the employees and not the airline.

'If these agreements cannot be altered through negotiations (with unions), the... saving needed to fully achieve the turnaround will have to be sourced elsewhere.

'(But) given that SAA has looked at every aspect of the business and done all it can to reduce costs and grow revenue, the only alternative will be to retrench employees.

'The current estimate is that if no savings are achieved in negotiations with labour on employment conditions, a total of 2,232 employees will have to be retrenched.'
The troubled airline, which posted an 883 mln rand loss in June, has already closed its Zurich route and would cease flying to Paris at the end of October as part of the process.

'The restructuring is aimed at turning SAA into a profitable entity on a sustainable basis, with the target of achieving a 7.5 percent profit margin in 12 to 18 months,' Bulunga said.

'This will put SAA on a par with its global competitors and allow the airline to stand proud as a profitable, sustainable entity.'

 Printable Version  | published Sep 10, 2007