haan
Posts: 79
Joined: Sun Aug 15, 2004 6:18 pm

SAA Is In Serious Trouble

Wed Nov 07, 2007 11:53 am

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.
 
Norcal773
Posts: 1052
Joined: Sat Feb 10, 2007 8:19 pm

RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 1:50 pm

What a shame for such a great airline Sad
If you're going through hell, keep going
 
JoKeR
Posts: 1759
Joined: Sat Nov 13, 2004 12:34 pm

RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 1:53 pm

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?
 
CHRISBA777ER
Posts: 3715
Joined: Thu Mar 01, 2001 12:12 pm

RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 3:16 pm

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???
 
AF022
Posts: 1633
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RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 5:15 pm

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?
 
davescj
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RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 5:19 pm

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?
 
speedbird128
Posts: 1562
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RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 9:28 pm

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
 
MaverickM11
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Joined: Thu Apr 06, 2000 1:59 pm

RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 9:45 pm

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
 
TravelGuy
Posts: 47
Joined: Mon May 07, 2007 12:58 am

RE: SAA Is In Serious Trouble

Wed Nov 07, 2007 9:55 pm

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.
 
AFGMEL
Posts: 190
Joined: Wed Jul 18, 2007 8:39 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 12:16 am

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
 
multimark
Posts: 411
Joined: Sat Jul 29, 2006 1:53 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 12:24 am

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.
 
MaverickM11
Posts: 15270
Joined: Thu Apr 06, 2000 1:59 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 12:29 am

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
 
Viscount724
Posts: 18997
Joined: Thu Oct 12, 2006 7:32 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 12:46 am

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".
 
connies4ever
Posts: 3393
Joined: Sat Feb 25, 2006 10:54 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 12:49 am

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.
 
ScottB
Posts: 5447
Joined: Fri Jul 28, 2000 1:25 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 1:03 am

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.
 
Norcal773
Posts: 1052
Joined: Sat Feb 10, 2007 8:19 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 2:55 am

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
 
longhaul67
Posts: 135
Joined: Sat Jan 13, 2007 9:17 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 3:28 am

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
 
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Pellegrine
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RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 3:49 am

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, here we go!!!
 
pilotdude09
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Joined: Mon May 02, 2005 12:35 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 3:56 am

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.........
 
Norcal773
Posts: 1052
Joined: Sat Feb 10, 2007 8:19 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 4:05 am

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
 
longhaul67
Posts: 135
Joined: Sat Jan 13, 2007 9:17 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 8:09 am

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]
 
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PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 8:15 am

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.
 
bill142
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Joined: Wed Aug 04, 2004 1:50 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 11:19 am

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.
 
Stickers
Posts: 74
Joined: Tue Sep 04, 2007 7:10 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 2:38 pm

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
 
Umhlanga
Posts: 122
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RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 2:46 pm

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.
 
caspritz78
Posts: 229
Joined: Fri Aug 24, 2007 4:51 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 3:07 pm

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 strategy. Typical for any state owned company.
 
A390
Posts: 138
Joined: Sun Sep 04, 2005 7:21 pm

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 3:09 pm

I don't think SAA know if they are in a profit or a loss. Bad management !!!
Cut costs at the top, fire Khaya
 
2travel2know
Posts: 2236
Joined: Sun Apr 10, 2005 7:05 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 4:02 pm

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 great airlines, what happened to them?
Ask those who run them.
I don't work for COPA Airlines!
 
Stickers
Posts: 74
Joined: Tue Sep 04, 2007 7:10 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 4:22 pm

Quoting Umhlanga (Reply 24):
The 'profits' almost certainly include government bailout money. Earlier this year,

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 weren't profitable at all, they were bailed out, as the afore mentioned threads have clearly detailed.

Two things come to mind, firstly, I wonder how the hundreds of retrenched SAA employees feel reading such an article, and secondly, how come they asked for so much money if they clearly didn't need all of it to become profitable? Will they give the excess back??

Sincerely
"Confused"
 
luv2fly
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Joined: Tue May 13, 2003 2:57 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 4:30 pm

Quoting Pellegrine (Reply 17):
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......."

In theory yes in reality no, if you have already paid off the purchase then good luck getting the money back.
You can cut the irony with a knife
 
speedbird128
Posts: 1562
Joined: Tue Oct 28, 2003 2:30 am

RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 4:41 pm

Quoting 2travel2know (Reply 27):
Has MANGO set its eyes on SA?

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 keep salaries down...
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QANTAS077
Posts: 5175
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RE: SAA Is In Serious Trouble

Thu Nov 08, 2007 11:20 pm

Quoting Speedbird128 (Reply 6):
ZS-SAZ operated JNB-PER.

ended up staying here for 3 days...

you can see my shot of it at the "other" site.
 
speedbird128
Posts: 1562
Joined: Tue Oct 28, 2003 2:30 am

RE: SAA Is In Serious Trouble

Fri Nov 09, 2007 7:41 am

Quoting Stickers (Reply 28):
in fact a straight faced shameful lie

That's a requirement now in SA.

Quoting Stickers (Reply 28):
Will they give the excess back??

After what's been embezzled, stolen, misappropriated, stolen or embezzled  Wink they will be asking for another 4 billion handout...
A306, A313, A319, A320, A321, A332, A343, A345, A346 A388, AC90, B06, B722, B732, B733, B735, B738, B744, B762, B772, B7
 
threepoint
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Joined: Fri Oct 14, 2005 10:49 am

RE: SAA Is In Serious Trouble

Fri Nov 09, 2007 7:59 am

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

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 least, it used to. I confess I haven't used one since the advent of online booking.
The nice thing about a mistake is the pleasure it gives others.
 
davescj
Posts: 1105
Joined: Wed Jun 13, 2007 1:46 am

RE: SAA Is In Serious Trouble

Fri Nov 09, 2007 9:32 am

Quoting Threepoint (Reply 33):
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 least, it used to. I confess I haven't used one since the advent of online booking.

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 ticket to get the VISA. Oh well......I'm sure it'll be fine.....(ha ha)

Dave
Can I have a mojito on this flight?

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