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SAA Is In Serious Trouble  
User currently offlineHaan From South Africa, joined Aug 2004, 289 posts, RR: 1
Posted (7 years 1 month 2 weeks 2 days ago) and read 6111 times:

SAA: Give us R744m to axe jobs

Cape Town - Members of Parliament on Wednesday heard a plea from the troubled state airline, South African Airways, for an injection of R744.4m to pay for one-time labour restructuring costs. The cash, they were told, is needed before the last day of this month.Parliament's finance portfolio committee heard an appeal from the airline to support Finance Minister Trevor Manuel's adjustments appropriation bill which will allow the money to be paid over, even though it was not in his original budget in February.SAA acting chief financial officer, Clive Else, told the committee that to restore the company to profitability - in fact to a bottom line profit of 7.5% which he said is its peer group standard - it will take a minimum of a R2.7bn improvement in its finances. Departmental initiatives, which include labour restructuring, will amount to R1.01bn of this.

Started at the top
He said that the job cuts started at management level with 30% of managers losing their jobs. "Two hundred and twenty managers were eliminated as a first step," Else said. "This now needs to filter all the way down."He told the MPs that there had been extensive negotiations with all three main unions in the company, which were still going on. "The concessions relating to staff will affect all levels, and will affect airport staffing, international offices, sales force, Voyager, one-stop-shop, Air Chefs, finance, international finance offices and revenue accounting," he said.He said that all staff had been served with a "section 189" letter to begin a consultation process, and the 60 day negotiating period technically expired at midnight on Monday.

Retrenchments
"The maximum number of employees to be forcibly retrenched, if no savings are made from conditions of employment, will be 2 232," Else said. But he said that voluntary severance packages which were granted to management had also now been taken by other employee groups.He said the 2 232 retrenchments represented the worst-case scenario. The exact number was now being finalised. The precise total of retrenchment and severance pay could only be determined at the end of the negotiations.

34 replies: All unread, showing first 25:
 
User currently offlineNorcal773 From United States of America, joined Feb 2007, 1451 posts, RR: 12
Reply 1, posted (7 years 1 month 2 weeks 1 day 22 hours ago) and read 5735 times:

What a shame for such a great airline Sad


If you're going through hell, keep going
User currently offlineJoKeR From Serbia, joined Nov 2004, 2245 posts, RR: 9
Reply 2, posted (7 years 1 month 2 weeks 1 day 22 hours ago) and read 5720 times:

Quoting Norcal773 (Reply 1):
What a shame for such a great airline Sad

I second your thoughts.... who is to blame though? Surely not due to lack of pax?



Kafa, čaj, šraf?
User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 62
Reply 3, posted (7 years 1 month 2 weeks 1 day 20 hours ago) and read 5452 times:

Quoting Haan (Thread starter):
Give us R744m to axe jobs

How ironic given they retired the 744 this week.

Quoting Haan (Thread starter):
Cape Town - Members of Parliament on Wednesday heard a plea from the troubled state airline, South African Airways, for an injection of R744.4m to pay for one-time labour restructuring costs. The cash, they were told, is needed before the last day of this month.Parliament's finance portfolio committee heard an appeal from the airline to support Finance Minister Trevor Manuel's adjustments appropriation bill which will allow the money to be paid over, even though it was not in his original budget in February.SAA acting chief financial officer, Clive Else, told the committee that to restore the company to profitability - in fact to a bottom line profit of 7.5% which he said is its peer group standard - it will take a minimum of a R2.7bn improvement in its finances. Departmental initiatives, which include labour restructuring, will amount to R1.01bn of this.

Started at the top
He said that the job cuts started at management level with 30% of managers losing their jobs. "Two hundred and twenty managers were eliminated as a first step," Else said. "This now needs to filter all the way down."He told the MPs that there had been extensive negotiations with all three main unions in the company, which were still going on. "The concessions relating to staff will affect all levels, and will affect airport staffing, international offices, sales force, Voyager, one-stop-shop, Air Chefs, finance, international finance offices and revenue accounting," he said.He said that all staff had been served with a "section 189" letter to begin a consultation process, and the 60 day negotiating period technically expired at midnight on Monday.

Retrenchments
"The maximum number of employees to be forcibly retrenched, if no savings are made from conditions of employment, will be 2 232," Else said. But he said that voluntary severance packages which were granted to management had also now been taken by other employee groups.He said the 2 232 retrenchments represented the worst-case scenario. The exact number was now being finalised. The precise total of retrenchment and severance pay could only be determined at the end of the negotiations.

Sounds like they are cutting costs by shedding the excess. They are lucky they dont live in Italy or France where you just cannot make decisions like that and not get destroyed by the Unions for it. Good luck to them.



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
User currently offlineAF022 From France, joined Dec 2003, 2173 posts, RR: 1
Reply 4, posted (7 years 1 month 2 weeks 1 day 18 hours ago) and read 5252 times:

It is almost too bad that their inflight service is so great - I wouldn't be surprised if management sees SAA as a more important carrier than it really is. Dangerous territory. The Pan-Amization of SAA?

User currently offlineDavescj From United States of America, joined Jun 2007, 2307 posts, RR: 0
Reply 5, posted (7 years 1 month 2 weeks 1 day 18 hours ago) and read 5229 times:

And I plan to be flying on SAA come March.....I hope they are still flying!

Dave



Can I have a mojito on this flight?
User currently offlineSpeedbird128 From Pitcairn Islands, joined Oct 2003, 1648 posts, RR: 2
Reply 6, posted (7 years 1 month 2 weeks 1 day 14 hours ago) and read 4900 times:

Quoting CHRISBA777ER (Reply 3):
How ironic given they retired the 744 this week.

And in other news  Smile whilst taxiing an A340-600 off the runway at Cape Town International last Friday, saw the 747 catching a few more flights after it's official retirement due to the A340-600 being out of action. ZS-SAZ operated JNB-PER. Not sure how many more 744 flights will be done until the 346 is back in operation.



A306, A313, A319, A320, A321, A332, A343, A345, A346 A388, AC90, B06, B722, B732, B733, B735, B738, B744, B762, B772, B7
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17824 posts, RR: 46
Reply 7, posted (7 years 1 month 2 weeks 1 day 14 hours ago) and read 4839 times:

Quoting Norcal773 (Reply 1):
What a shame for such a great airline

Great airline? It's been a financial mushroom cloud for as long as I can remember.



E pur si muove -Galileo
User currently offlineTravelGuy From United States of America, joined May 2007, 123 posts, RR: 0
Reply 8, posted (7 years 1 month 2 weeks 1 day 13 hours ago) and read 4788 times:

Quoting Norcal773 (Reply 1):
What a shame for such a great airline Sad

With all respect, if the airline were "such a great airline" then they wouldn't be in such a financial mess.

If you are referring to inflight service or nostalgic memories of flights/liveries/employment that is one thing, but to generally apply the adjectivial phrase "great airline" I feel, IMHO, is a stretch.

but I am being pedantic.....

Having flown them myself, I feel that they offered me an enjoyable experience onboard. It is a shame that many people face losing their jobs, not to mention the potential negative knock-on effect to ZA tourism, etc... if this restructuring involves reducing routes/frequencies.


User currently offlineAFGMEL From Australia, joined Jul 2007, 747 posts, RR: 0
Reply 9, posted (7 years 1 month 2 weeks 1 day 11 hours ago) and read 4507 times:

Quoting JoKeR (Reply 2):

I second your thoughts.... who is to blame though? Surely not due to lack of pax?

Bad Management. Their metal used to be old, but it was paid for if I remember correctly. The boere on this forum would know more about it than me though.



B 727-44/200 732/3/4/8/9 767-3 742/3/4, 772/3, A319/20/21 332/333 342/3 , DC3/4/10, F28/50/100, ATR72
User currently offlineMultimark From Canada, joined Jul 2006, 797 posts, RR: 0
Reply 10, posted (7 years 1 month 2 weeks 1 day 11 hours ago) and read 4469 times:

Quoting TravelGuy (Reply 8):



Quoting TravelGuy (Reply 8):
With all respect, if the airline were "such a great airline" then they wouldn't be in such a financial mess.

Not true. Pan Am was a "great" airline, Canadi>n was a "great" airline, but both were financial basket cases at the end.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17824 posts, RR: 46
Reply 11, posted (7 years 1 month 2 weeks 1 day 11 hours ago) and read 4438 times:

Quoting Multimark (Reply 10):
Not true. Pan Am was a "great" airline, Canadi>n was a "great" airline, but both were financial basket cases at the end.

They weren't "great" either for quite a long time before their respective demises; in fact they were both pretty awful for years.



E pur si muove -Galileo
User currently offlineViscount724 From Switzerland, joined Oct 2006, 26005 posts, RR: 22
Reply 12, posted (7 years 1 month 2 weeks 1 day 11 hours ago) and read 4359 times:

Quoting MaverickM11 (Reply 11):
Quoting Multimark (Reply 10):
Not true. Pan Am was a "great" airline, Canadi>n was a "great" airline, but both were financial basket cases at the end.

They weren't "great" either for quite a long time before their respective demises; in fact they were both pretty awful for years.

Canadian was still much better than average even just prior to the AC merger, although not up to the standards (at least in inflight service) of their predecessor CP Air which was hard to beat in that area. Technically and in terms of safety, you certainly can't qualify Canadian as "awful".


User currently offlineConnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 13, posted (7 years 1 month 2 weeks 1 day 11 hours ago) and read 4350 times:

Quoting MaverickM11 (Reply 11):
They weren't "great" either for quite a long time before their respective demises; in fact they were both pretty awful for years.

 checkmark  2nd that. Canadian only made money once in its' lifetime, IIRC. Rhys Eyton just never figured out how to run an airline in anything like a business manner. In the earlier form as Canadian Pacific it _was_, service-wise at least, a truly great airline. It made money some years, lost money others, and certainly kept Air Canada at least to some degree honest.



Nostalgia isn't what it used to be.
User currently offlineScottB From United States of America, joined Jul 2000, 6826 posts, RR: 32
Reply 14, posted (7 years 1 month 2 weeks 1 day 10 hours ago) and read 4301 times:

Quoting MaverickM11 (Reply 11):
Quoting Multimark (Reply 10):
Not true. Pan Am was a "great" airline, Canadi>n was a "great" airline, but both were financial basket cases at the end.

They weren't "great" either for quite a long time before their respective demises; in fact they were both pretty awful for years.

I flew Pan Am several times in the 80's; their service was so horrible that it was no surprise to me when they went belly-up.


User currently offlineNorcal773 From United States of America, joined Feb 2007, 1451 posts, RR: 12
Reply 15, posted (7 years 1 month 2 weeks 1 day 8 hours ago) and read 4178 times:

Quoting MaverickM11 (Reply 7):
Great airline? It's been a financial mushroom cloud for as long as I can remember.



Quoting TravelGuy (Reply 8):
With all respect, if the airline were "such a great airline" then they wouldn't be in such a financial mess.

My bad, I should have explained myself better. Great inflight service is what I meant, not necessarily a great airline.



If you're going through hell, keep going
User currently offlineLongHaul67 From Norway, joined Jan 2007, 248 posts, RR: 1
Reply 16, posted (7 years 1 month 2 weeks 1 day 8 hours ago) and read 4117 times:

Quoting Davescj (Reply 5):
And I plan to be flying on SAA come March.....I hope they are still flying!

Be careful about buying your ticket way in advance, in case they go out of business your money will be lost. It happened to a friend of mine when RG went bust


User currently offlinePellegrine From United States of America, joined Mar 2007, 2495 posts, RR: 8
Reply 17, posted (7 years 1 month 2 weeks 1 day 8 hours ago) and read 4050 times:

It must be hard when your leasing company is fleecing you to the equivalent of $75 million/year on the recently retired 6 744s alone.

Quoting LongHaul67 (Reply 16):

Be careful about buying your ticket way in advance, in case they go out of business your money will be lost. It happened to a friend of mine when RG went bust

If you pay via credit card...issued by a US bank at least...you can reverse the charges faster than you can say, "drop drop drop it like it's hot......."



oh boy!!!
User currently offlinePilotdude09 From Australia, joined May 2005, 1777 posts, RR: 4
Reply 18, posted (7 years 1 month 2 weeks 1 day 7 hours ago) and read 4031 times:

Very Ansett esque, needing several hundred million dollars etc


If they are the national carrier surely the SA Government will help them out? Otherwise its going to be more and more cuts and the fuel price could help put the nail in the coffin.



Qantas, Still calling Australia Home.........
User currently offlineNorcal773 From United States of America, joined Feb 2007, 1451 posts, RR: 12
Reply 19, posted (7 years 1 month 2 weeks 1 day 7 hours ago) and read 4012 times:

Quoting Davescj (Reply 5):
.....I hope they are still flying!



Quoting LongHaul67 (Reply 16):
Be careful about buying your ticket way in advance, in case they go out of business your money will be lost. It happened to a friend of mine when RG went bust

C'mon, you guys don't really think SAA will fold between now and March do you? They'll be bailed out by the government eventualy, they are too important for the country but then again, who would have thunk it with Panam?



If you're going through hell, keep going
User currently offlineLongHaul67 From Norway, joined Jan 2007, 248 posts, RR: 1
Reply 20, posted (7 years 1 month 2 weeks 1 day 3 hours ago) and read 3813 times:

Quoting Norcal773 (Reply 19):
C'mon, you guys don't really think SAA will fold between now and March do you?

I flew FRA-GIG with RG in Jan 06 and there were no signs of serious trouble like bankruptcy. About 6 months later they were out of business. But I have no reason to believe SAA is as mismanaged as RG used to be.

[Edited 2007-11-08 00:11:08]

[Edited 2007-11-08 00:12:30]

User currently offlinePA110 From United States of America, joined Dec 2003, 2017 posts, RR: 23
Reply 21, posted (7 years 1 month 2 weeks 1 day 3 hours ago) and read 3789 times:
Support Airliners.net - become a First Class Member!

And yet Khaya opens routes for political rather than commercial reasons, and then wonders why the airline loses money. Perhaps retrenchment should start at the very top. Sack Khaya first. Nobody needs an ANC lackey to run the airline straight into the ground.


It's been swell, but the swelling has gone down.
User currently offlineBill142 From Australia, joined Aug 2004, 8466 posts, RR: 8
Reply 22, posted (7 years 1 month 2 weeks 1 day ago) and read 3563 times:

Quoting Norcal773 (Reply 19):
They'll be bailed out by the government eventualy, they are too important for the country but then again, who would have thunk it with Panam?

But unlike the US there aren't many alternatives for South Africa.


User currently offlineStickers From South Africa, joined Sep 2007, 105 posts, RR: 0
Reply 23, posted (7 years 1 month 2 weeks 21 hours ago) and read 3322 times:

I just read this article dated today about SAA "Flying into the profits"

Read it here:

http://www.fin24.co.za/articles/defa...x?Nav=ns&ArticleID=1518-24_2217638

The article basically states that SAA have made a net profit of R136m in the first 6 months of this financial year. Now i am the first to admit that i do not know that much about business or running a major airline, but i don't understand how an airline that is making R136m profit in six months can be asking the SA government to bail it out to the tune of R744m.

I would love some forum members with a greater knowledge of the situation or business principles in general to explain this one to me.

Thanks
Stickers  Confused  Confused


User currently offlineUmhlanga From United States of America, joined Mar 2006, 128 posts, RR: 1
Reply 24, posted (7 years 1 month 2 weeks 21 hours ago) and read 3297 times:

The 'profits' almost certainly include government bailout money. Earlier this year, SAA asked the SA Govm't for R4 BILLION in bailout funds. The Govm't of course agreed, and the money will be pumped into SAA over the next few years. There's no way SAA is a profitable airline. There are plenty of threads on this board (and others) detailing the SAA bailout.

25 Caspritz78 : I doubt that anything will change at SAA. As long they can go to the government and ask for money they have no reason to really look into their strate
26 A390 : I don't think SAA know if they are in a profit or a loss. Bad management !!! Cut costs at the top, fire Khaya
27 2travel2know : Maybe SA will end up like AR or worse like RG? G3 bought RG, Has MANGO set its eyes on SA? SA, AR and RG had all the potential to become and remain gr
28 Stickers : If the profits do include this money, then to report that they have made such a profit is erroneous and in fact a straight faced shameful lie. They w
29 Luv2fly : In theory yes in reality no, if you have already paid off the purchase then good luck getting the money back.
30 Speedbird128 : Mango *is* SAA (like TED and United). They are 737-800's from SAA, and is the low cost arm of SAA. Crew is on a different contract to SAA in order to
31 QANTAS077 : ended up staying here for 3 days... you can see my shot of it at the "other" site.
32 Post contains images Speedbird128 : That's a requirement now in SA. After what's been embezzled, stolen, misappropriated, stolen or embezzled they will be asking for another 4 billion h
33 Threepoint : Using a travel agent should also afford you protection from being stranded or losing your ticket in the event of an airline going tango-uniform. At l
34 Davescj : Since I'm flying to FIH (Kinshasa) I had to get a paper ticket, so went to an AMEX TRS agent. Hopefully everything will be fine. Had to get the ticke
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