July 01, 2007

SAA to hang on to 'good' staff

South African Airways (SAA) is to launch a series of new routes from the continent to markets in the Americas and Europe as it attempts to steal a greater share of the lucrative business market from its rivals.

SAA chief executive Khaya Ngqula announced these plans as he unveiled the airline's results, which showed an R833m loss for the period that ended in March.

He blamed depreciation in the value of the rand against the dollar and escalating fuel prices.

Ngqula said the writing had long been on the wall that the airline needed to restructure to cut costs before it was forced to close shop.

"The next 18 months will be tough times at SAA, where some people would opt to go. Job contents would also be changed and we have already started doing that. The challenge will be about keeping those who are good for the airline and those who want to be at SAA.

'Not nice to retrench people'

"It is not nice to retrench people and has never been nice. We could have gone the shutdown route. But the government has given us the go-ahead to restructure the business," Ngqula said.

SAA indicated in November that it intended retrenching 1 000 employees. In May, when it unveiled details of its restructuring programme, it backtracked and said it had not finalised the number of people who would be affected by the restructuring process. The national airline had 10 085 employees at the end of March.

Labour has indicated its objection to retrenchments, arguing that alternative revenue-generating initiatives should be explored.

South African Transport and Allied Workers' Union president Ezrom Mabyane said the union had a blueprint it intended to present to management.

Sources close to SAA said the unions would object to the proposed changes in employment conditions.

Wage talks

Some of the changes SAA is planning to institute include reduction of allowances and standardisation of sick leave. SAA is also about to embark on wage negotiations and unions at SAA are said to have tabled a 12% demand across the board.

Bhabhalazi Bulunga, SAA general manager for human resources, said all conditions of employment would be subject to negotiations with labour.

He said no wage offer had been determined by SAA.

Regarding retrenchments, Bulunga said 30% of its 600 managers would be affected by the restructuring. Junior-level worker negotiations are expected to start in August.

Ngqula said the plan to simplify and streamline the business had started. He said SAA was in a fortunate position in that it was implementing its restructuring amid a growing business environment and economy.

He said revenues were beginning to shoot up, which would mitigate costs.

"The end result is to offer our customers a truly remarkable service that will allow SAA to compete with the best in the world. We are a premium airline offering all services," Ngqula said.

Read the news release on the source at: News 24 South Africa

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