What The Real Problem Is At Saa

[FlingWingKing]

FANTASTIC post SAT_BOSS.

People, focus. The last two pages on this thread were all about who earns what and who not.

The problem at SAA is not the pilots or any of its operational employee's.

....it is not the fact that it used to be an old SAAF boy's club.

....neither is it the fact that SAA pilot salaries are not on par with the local market.

The problem with SAA is simply just KK management....from day one. It has been a place where "connected" people can make a little money from a badly controlled state department....ie, thieves stealing taxpayers' money.

The problem at present seem to be the worst management yet. We have a totally incompetent management team, lead my a photocopier salesman of the early nineties, who is totally in over his head.

Combined with this total lack of leadership, is corruption in the form of BEE contracts. BEE companies have been paid for services rendered but are yet to render the service.

[JuniorFO]

Hi SAASFO

Just to set the record straight. All employees submitting a letter of resignation are given a 2 week "cooling off" period in which resignations may be rescinded. Due to personal circumstances at the time, I decided to exercise that option within the window.

It has nothing to do with race, or that I'm "indian". Hopefully this will clear any misconceptions and reduce animosity.

All pilots at SAA are treated equally. And one has to only look at pilots who have been dismissed in the past, and you will note that race has played no role whatsover in that decision, only competence.

[411 B]

Dont TUNE BruObviously your a fantasic Airbus pilot. I don`t know who my fleet Captain isWell done, did they offer you a COMMAND to stay? Looks like they may need a few pilots to stay, now that EK are looking at SAA for crew. Good luck, and fly the flag high

[Yossarian]

Been very quiet in Dubai for the last few years, but suddenly my phone is starting to ring a lot with guys "making enquiries". A few have gone further. The sign is there. Read it anyway you like.

[SAASFO]

JuniorFO, nobody is having a go at you, and you are certainly the calibre of pilot that SAA should be trying to retain, but the fact is that you were personally contacted by two SAA flight ops managers, but no white pilots were contacted.

Additionally, SAA's negoatiators have stated to SAAPA that if there are retrenchments, they would exclude DG pilots, meaning that their original intention has been to try and reduce the number of white pilots at SAA. In fact, I believe they have actually stated that to the SAAPA negotiators. Obviously SAAPA would not allow that but that the company actually thinks they can discriminate against white pilots makes me sick

[fly nice]

JuniorFO,

Quote:
All pilots at SAA are treated equally.

And one has to only look at pilots who have been dismissed in the past, and you will note that race has played no role whatsover in that decision, only competence.

....only some are treated more equally than others. It did get at least one individual some massive leeway and a foreign audience before being shown the door anyway. This is not a dig at you, just your misguided statement.

[nugpot]

I think this article is a good illustration of "Command and Control" at SAA:

SAA told to 'pay up'

September 20 2007 at 07:20AM

National carrier South African Airways is facing a hefty legal bill after no-one arrived at the Durban High Court on Wednesday to represent it in a matter in which it was suing a local travel agent for more than R4-million.

KwaZulu-Natal Judge President Vuka Tshabalala first looked incredulous, and then laughed, when no-one appeared when the matter was called on the trial roll.

"No appearance for SAA?" he said, shaking his head. He ordered the usher to call the name outside, jokingly asking if there was a plane out there.

He then dismissed the action, ordering the airline to pay punitive costs.

The matter which should have gone on trial was a claim for R4,7-million against Riaz Motala, the manager of Globetrotters Travel and Tours, trading as Skylink, in Albert Street.

In documents before the court, the airline claimed that Skylink had sold tickets on its behalf. Between November and December 2004, Skylink had processed cash ticket sales to the value of R4,7-million but had failed to hand over the money.

The airline further alleged that between 2003 and 2005, Motala had carried on business "recklessly, with the intent to defraud creditors and/or grossly negligently".

It was alleged that, acting with others, he had developed a credit facility with major banks to channel funds from Globetrotters "to other unknown facilities".

He had also deposited personal cheques into the business bank account to misrepresent to financial institutions and the airline that the company had sound financial standing.

Motala was opposing the court action, describing the allegations as "wanton, reckless and vexatious".

[ERASER]

(This was e-mailed to SAA staff on Friday afternoon. Question # 11 about sums the actual purpose of the restructuring. )

Questions & Answers

(GM Roadshows)

Question 1

Now that the company has issued Section-189 letters to all employees, what is the process?


The section-189 letters that SAA issued on 5 September gives the company 60 days to consult with recognized trade unions in order to come up with solutions to the R638-million gap. We are talking about alternatives to retrenchments, the bulk of which relates to renegotiating conditions of employment and labour agreements to standardise employment conditions across the board. A number of agreements have been put in place with employees over the past 10 to 15 years, some of which are highly onerous to the organisation. Rather than having different agreements with different groupings of employees, be it management, pilots, crew members or junior employees, the proposal is to standardise and simplify conditions of employment throughout the organisation. This will help SAA to return to profitability on a sustainable basis.

Question 2

What’s going to happen if management and the unions cannot reach agreement?


At the end of the 60 days, if there is no viable alternative on the table and we cannot close the R638-million gap, we will unfortunately have to start retrenching. 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 and labour agreements, a total of 2 232 employees will have to be retrenched. This will take place in a staggered manner.

Question 3

What happens if we save only a portion of R638-million in the consultations?


The number of people to be retrenched will be determined by the extent to which we can close the gap. The more that we can save through renegotiating conditions of employment and labour agreements, the fewer people we will have to retrench.




Question 4

What are the timelines, ie, when is the final decision to be made?


At the end of the 60 day period, SAA management will announce the extent of the retrenchments as well as the process and timing thereof.

Question 5

What impact will the Section-189 process have on me?


Every job in the organisation is affected by the Section-189 process. This consultation process has already taken place with managers, with the result being that we have reduced management by 223 positions. We are now moving into the next phase, which means that all jobs in the bargaining units are affected by Section-189. There has to be consultation with the representative unions which will make recommendations to management on your behalf. Employees in the bargaining units should make their recommendations through to the unions.

Question 6

Will junior employees receive Voluntary Severance Packages (VSPs)?


There will be VSPs offered to junior employees whose jobs are affected. This will take place in a similar manner to those positions affected due to the grounding of the Boeing 747-400s.

Question 7

To what extent have the recent resignations reduced the 2 232 figure?


The R638-million gap is based on the budget at the beginning of this financial year. Any resignations will contribute to a reduction in the 2 232-figure.

Question 8

Are the pilots being affected and if so, how?


The section-189 notice applies equally to all employees of SAA. To the extent that flight numbers are being reduced, an appropriate number of pilots and cabin crew will be affected.

Question 9

Have the unions agreed to make concessions to their existing agreements?


The unions have made some concessions but these are not fundamental in nature. We need to standardise all conditions of employment if we are to reduce costs on a sustainable basis and secure the future profitability and stability of the airline. We are hopeful that our negotiations will lead to an outcome that is in the best interests of the airline.



Question 10

If SAA cuts 2 232 jobs, will it be able to operate effectively?


The plan is not to retrench this number of people, but rather to fundamentally restructure and reduce SAA’s cost base through renegotiating all labour agreements and conditions of employment. If we do have to retrench the total of 2 232 jobs, it will be staggered over a period of time and we will have to consider the options regarding how SAA operates in the future.

Question 11

Why has SAA management said that all agreements with unions should be scrapped and that a clean-slate approach should be adopted?


The aim of having standardised labour agreements is to have an equitable agreement across all employee groups so that there are no privileged groups, including management. The current agreements were inherited from the past when the country’s apartheid policies were still in place and they must be reformed if SAA is to grow in the future. In their totality, they prevent the country’s employment equity regulations from being fully implemented.

It is not possible to retain these agreements as they will ultimately hold SAA back in the future – we need to adopt a clean-slate approach and renegotiate all labour agreements. These agreements were put in place when SAA was effectively the only national airline operating in SA; and we now need to be able to reduce costs to operate in a competitive environment.

Some examples of these agreements include:

· SAA cannot open a new route without negotiating with labour, typically resulting in additional costs for the airline;

· In terms of employing pilots, the experience of the new pilot cannot be taken into consideration in terms of being promoted to a captain. Promotion is made in terms of seniority, which tends to prejudicial to black pilots

· Retrenchment of pilots is also based on seniority so, for example, a 60-year old pilot cannot be retrenched ahead of a 40-year old pilot. Again, this tends to affect black pilots who were employed at SAA most recently.

Question 12

Why has the figure of proposed retrenchments increased in recent months?


SAA has approached the issue of labour in a phased manner. The first phase was management, the second phase relates to 711 employees who will be affected by various initiatives being implemented, such as the grounding of the B747-400s and the launch of the One-Stop-Shop, which combines SAA’s check-in, ticketing and Voyager functions. The current phase is the re-negotiation of labour agreements and conditions of employment, which aims to result in the saving of R638-million.




Question 13

What sacrifices will management be making?


All initiatives, including the standardisation of conditions of employment, include management. In the process to date, 223 managers are currently being retrenched. SAA’s challenge regarding costs is not a recent one. Over the past two years, senior management has not received any salary increases or bonuses, which they were entitled to. It is also worth noting that with the exit of 223 managers, the remaining managers will have to take on more work than they currently have.

Question 14

What can go wrong during the restructuring?


If SAA employees take their eye off the ball and lose focus, it will affect the business. Employees need to ensure that they keep their focus on customers to protect SAA’s revenue, and to make sure that the business continues to operate effectively.

Question 15

What if I want to contribute to cost savings?


SAA management remains open to all suggestions from employees on saving costs and generating revenue. There are various avenues for people to come forward – you can go to your union representative, your line manager or write directly to the CEO.

Question 16

Will the sale and partial privatisation of certain divisions of SAA help the financial situation?


SAA is currently doing a due diligence exercise of each of the entities to establish the possibility of getting outside equity partners. One of the reasons SAA management plans to unbundle the business is to simplify and make it more manageable. This will give management greater control over the finances of the organisation.

Question 17

What happens if any division of SAA gets more work?


All additional work will be evaluated against the overall strategy for that unit. If it makes sense to take on additional work as it will allow SAA to grow, then we will do so. But SAA cannot grow its way out of trouble, it first needs to turn the airline around, stabilise it and then grow.




Question 18
SAA has set a target of a 7.5% profit-margin before tax within a period of 18-month. Why has SAA set such a high profit-before-tax margin?


The average profit-margin for the peer group of airlines against which SAA benchmarks itself is forecast at more than 7, 5% this year. This includes airlines such as British Airways, Qantas, Lufthansa, Singapore Airlines, Cathay Pacific, Delta and Air New Zealand. These airlines are SAA’s major international competitors. Qantas, for example, is expecting a profit margin of 12% this year while British Airways’ is expected to reach more than 10%. It is important for SAA to set and meet this target to protect our future, given the volatility of fuel (the oil price this week hit a record high of US$80); fluctuations in the exchange-rate and vigorous competition in the market. A profit margin of 7, 5% is essential if SAA is going to generate a sufficient cash-flow to acquire new aircraft without which we will not be competitive in the future.

Question 19

Does SAA have a plan in place to counter the threat posed by the increased frequencies given to other airlines, most recently Emirates?


While SAA welcomes competition, any increased frequencies allocated to another airline raise the bar for the airline. This will require the airline to find additional cost-savings as well as new sources of revenue. One element of the current restructuring plan is to scale down SAA’s cost-structure to allow SAA to compete effectively, which in turn will help to restore the airline to profitability over the next 12 to 18 months. The vigorous nature of competition from other airlines is one of the reasons we have set a profit margin target of 7, 5%. It is a critical element of ensuring that SAA can survive, be competitive and grow in the future.

[thincatblue]

The problem is Suitcaseman - the political puppet masters in the goverment would still holding the ropes - the only inprovement that I would suggest to your solution is to privatise SAA completely- no more BEE or afirmative / equal opportunity employment- get the best man or woman for the job - let SAA fly to destinations that makes financial sense and not becauce they were supportive of the "struggle".

Would this ever happen? I think not!

[Avi8tor]

Amen brother. Get the state out of the airline business.

Sadly the history of the nation will haunt SAA for many years to come. The good ol' SAR&H was for white, mainly afrikaans males after 1948. Now 60 yrs later, the new lot are off down the same road.

Kinda didn't think we were gonna get away with a 'sorry', did you?