King Sized Headache for SAA
From News24
King-size headache for SAA
Johannesburg - About 100 senior managers at South African Airways (SAA) have applied for voluntary severance packages, but this has created a king-size headache for chief executive Khaya Ngqula who wanted at least 300 of the 600 top managers to quit by the end of this month.
Ngqula had planned to introduce a new management structure by the beginning of next month as he tries to return the airline to profitability.
Insiders said the woes of the national airline were far from over.
SAA needs to retrench about 5 000 employees to meet the internationally-accepted norm of one manager for seven workers. According to the current figures, four workers report to one manager.
Most airlines around the world have cut jobs as they try to reduce costs and return to profitability.
Onkgopotse Tabane, SAA spokesperson, said the airline had not considered general staff retrenchments because it believed it could achieve significant savings by trimming the management team.
"Although about 100 managers have applied for packages, this does not begin to resolve the problem faced by Ngqula because the majority of those who have applied are not the people that SAA wants to get rid of.
"It is common knowledge that in many instances, the highly talented managers who can secure jobs anywhere are the ones who offer to quit. Those who have nowhere else to go remain and, unfortunately, they are the ones whom the CEO is targeting for packages," said a senior manager.
Increased competition
Tabane said the airline would decide on its course of action after assessing the applications.
SAA had to extend the deadline by two weeks for people who wanted to accept the packages after a seemingly low uptake on the initial deadline of the middle of last month.
The public enterprise department announced this week that R100m has been set aside for packages at the SAA.
Ngqula has received board approval to cut costs by reducing managers by half. He asked all his managers to apply for the packages.
"Some of those who have applied for packages will not be granted because there is still a need for talent.
Perhaps the bigger question is what will the CEO do now that his plan to reduce the structure at the top seems to have proved ineffective. And again, what will he do about the problem of a bloated workforce?" asked another manager.
SAA is facing increased competition on its domestic market from low-cost carriers.
The hike in the oil price this week compounded the airline's problems because fuel is one of its main costs.
It also aims to win back more business travel clients on its international routes.