Restructuring at SAA - loss of key staff

[r1skman]

Rumour is that key staff members are resigning at SAA. I have heard that the treasurer, head of Voyager and a couple of other key finance and sales people have resigned recently.

Rats leaving a sinking ship or disagreement with the latest turnaround plans? Time will tell....

[FuelFlow]

Interesting that you think someone in the Finance department is a " Key Staff Member".
Some others should start thinking like that! He He!!

[sbh684b]

And more will eave over the next few months due to the state SAA are now in. They loose all the quality staff, but dont do anything from stopping them to leave the airline.

[asianeagle]

SAA - : A Modern Parable

A Japanese company (Toyota) and a South African company (South African
Airways) decided to have a canoe race on the Vaal River. Both teams
practised long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile. The SAA team, very
discouraged and depressed, decided to investigate the reason for the
crushing defeat. A team of senior managers was formed to investigate and
recommend appropriate action. The conclusion was that the Japanese had
eight people rowing and one steering, while the SAA team had eight
people steering and one rowing.

Feeling a deeper study was in order, SAA management hired a consulting
company and paid it a large amount of money for a second opinion. The
consulting company advised, of course, that too many people were
steering the boat, while not enough were rowing.

Not sure of how to utilise that information, but wanting to prevent
another loss to the Japanese, the SAA team totally re-organised the
rowing team's management structure to include four steering supervisors,
three area steering superintendents and one assistant superintendent
< TT>steering manager. It also implemented a new performance system that
would give the one person rowing the boat greater incentive to work
harder. It was called The "Rowing Team Quality First Programme," with
dinners and free pens for the rower. There was a lot of discussion about
getting new paddles, canoes and other equipment, as well as extra
holidays for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, SAA management laid off the rower for poor performance,
halted development of a new canoe, sold the paddles and cancelled all
capital investments for new equipment. The money saved was distributed
to executives as bonuses and the team outsourced to India.
:}

[Frogman1484]

Judging from the state of the SAA's books, I doubt very much that an accountant was doing his job properly...maybe he is running away from the problem!:}

[springbok702]

"Interesting that you think someone in the Finance department is a " Key Staff Member".
when you dont get your pay at the end of the month you will realise that the finance department is 'key'

[Beta Light]

Springbok 702, you sound like the chef's - rather the cook's - in the military,

[r1skman]

Just got confirmation of the following:
1) Group Treasurer and Head of Fuel Management have resigned and are going to Etihad
2) Head of Tax, Head of Insurance, Head of Compliance and his 2IC, Head of SA sales have all resigned.
3) 30% management headcount reduction has been announced. With all the resignations this may not even be neccesary!
4) 747 are going to be parked
5) Negotiations with labour (inlcuding pilots) will commence soon to cut down on benefits.

[bianchi]

Wonder who else is going to"jump"ship ? Who knows maybe Etihad might get more than just ex-managers ?:bored:

[surely not]

I'm sure I remember reading threads from disenchanted SAA pilots complainingabout poor management decisions, wastage from the top etc?

Now that SAA are trimming back on the management suddenly they all knew what they were doing, despite the financial mess the airline is in!!

Resigned , or given the chance to resign? Either way, to an outsider it seems that the ruthless steps that it was claimed were needed are now being taken.

Sure it is hard for anyone to be made redundant, I know because it has happened a couple of times to me in my time in aviation. If it allows SAA to grow healthily again then it will be worth the pain.

[r1skman]

Problem is that some of these fellow are really good at what they do - their good work just gets ph*cked up by bad/no decision making from the executive and the board.

In my experience the good guys are always the first to go and some of these guys have clearly made up their minds even before it was clear that they would be cut. Guys like Etihad wouldn't hire anyone off the street and certainly not people that are part of the problem at SAA, would they?

I have also heard that many of those that have resigned were actually going to be part of the new structures post rationalisation. With their departure, the structures have had to be hastily revised, leaving SAA with a serious lack of depth.

[bianchi]

Jip I agree with you R1skman !!

[Capetonian]

June 4, 2007
State-owned South African Airways announced on Monday it was embarking on a restructuring plan in a bid to return to profitability within 18 months.
SAA said the move, which involves spinning off non-flight operations into seven subsidiaries, was expected to result in a ZAR2.7 billion rand (USD$378.8 million) turnaround over the next 12 to 18 months.
"In the face of a high cost base created by, amongst other things, uncompetitive ownership and aircraft lease costs, excessive head count and fuel price volatility, SAA must overhaul its entire business if it wants to survive," SAA Chief Executive Khaya Ngqula said in a statement.
SAA said it may seek outside equity partners for some of its unbundled units and that Air Chefs, the airline's catering supplier, and Galileo, the platform for the travel industry, would be sold outright.
"In principle, SAA needs to focus on its core businesses, and our core business is the movement of people and goods by air. Going forward we will focus on our strengths and explore the myriad opportunities for growth especially in the African market," Ngqula said.
The airline said the proposed timeline for completion of the plan was December 2008.
South Africa's public enterprises minister said in January an initial public offering of SAA could be years away and that the government had no plans to bail out the struggling airline.
The airliner said part of its fleet -- one owned and five leased B747-400 aircraft which are expensive to operate -- would be grounded.
SAA also announced that it would close the Paris route, which has been losing money, in October.
SAA posted a 90 percent fall in profit last year as fuel costs rocketed and said it would consider selling shares only when it had reduced its debts.
At the end of March last year, long-term liabilities amounted to ZAR4.6 billion (USD$645.4 million), while capital and reserves were ZAR1.179 billion (USD$165.4 million).
(Reuters)
Personally, I think Khaya Nquala is part of the problem, not part of the solution, but he's protected by BEE rules, nepotism, and the colour of his skin. Nothing new there.

[ested]

When will the grounding take place and whats happening to all the 747 drivers?
Will there be any pilot cuts? - If so, why then did they relatively recently employ more than 20 new piilots?

Whats SAAPA's take on the whole situation?

[whodunnit2]

I bet you that Cathay will be keeping a close eye on those 747's. Not sure if they can crew them though.

[r1skman]

Latest rumour - CFO has also resigned

[flare and touchdown!]

South African Airways major part of the new restructuring plan which will go ahead with goverment backing, will be to retire the remaining five 747-400 leases.

Costing the airline R500m in losses a year for the 747 operated Johannesburg - London route, SAA bids goodbye to its remaining 5 747's whose leasing prices are currently double those on the market at R1.3bn compared to the usual R660bn for leasing an average 747 anually.

Khaya Ngqula the CEO, announced 2 will depart the fleet by 2008, and the final 3 by 2010. The aircraft to replace them is at the moment unknown to the public.

However, the CEO was open to admit that SAA are "toes" in relation to service compared to their competitors, and the losses are partly from lack of loyal customers on the competitive London route. BA and Virgin now offer far superior services to SAA's ageing 747 product, and Ngqula said he was going to do something about it; to "win back our customers." With a focus to introduce even higher levels than that of the new A340-300/600 products, including improved service effeciency. Training for the staff is also an option in consideration.

This is just part of SAA's major restructuing plan for the next few years. It is similar to that of Air Canada's and Qantas' both of which have been a success. In fact, Khaya Ngqula's confidence in the airline is very good to hear, and he exclaimed even if he did not have goverment backing, he would put "his own money and possessions" into the airline which he believes "has a very optimistic future."

He was challenged about the unfair playing of SAA's recent history in relation to paying travel agents not to deal with competitors, to which they have just been fined heavily. The CEO exclaimed regret at this, and said "if we could turn back the clock we would".

This information was released in a recent interview in Johannesburg among the bad publicity SAA has been recently receiving. Part of the restructuring also includes dismissing up to 200 management employees and reducing the remaining management's benefits. With this, some staff have been reported to be taking 180days sick leave. The airline cannot afford this, and these staff issues are "on the table" - under review.

SAA has just received numerous awards at the International travel awards in the middle east, claiming "Best Airline website to Africa", "Best Airline to Africa" and numerous others. They have just released a new website to begin the turnaround of the currently money loosing airline.

[ERASER]

"Khaya Ngqula the CEO, announced 2 will depart the fleet by 2008, and the final 3 by 2010"

Well, all the B744 will be grounded as from 2007....??
Apparently the grounding schedule will be, Jul 07 x 1, Aug 07 x 1, Sep 07 x 1 and Nov 07 x 2.
Will they be parked (standing) for 1-2 years or will they be sub-leased?

E

[Baas]

SAA has just received numerous awards at the International travel awards in the middle east, claiming "Best Airline website to Africa", "Best Airline to Africa" and numerous others. They have just released a new website to begin the turnaround of the currently money loosing airline.



Better than SIA, BA, Virgin to name a few...?

[Frogman1484]

The best website is a good one. now I know that when I have to travel on SAA I know that they can really do good websites!!!

[starcrest]

SAA - : A Modern Parable

A Japanese company (Toyota) and a South African company (South African
Airways) decided to have a canoe race on the Vaal River...............Humiliated, SAA management laid off the rower for poor performance,
halted development of a new canoe, sold the paddles and cancelled all
capital investments for new equipment. The money saved was distributed
to executives as bonuses and the team outsourced to India.
:}


http://www.pprune.org/forums/images/statusicon/user_offline.gif http://www.pprune.org/forums/images/buttons/report.gif (http://www.pprune.org/forums/report.php?p=3321297)

Fantastic post Asianeagle, one of the best I have seen.

Even though it is a universal example, your post refelects SAA reality to the tee (hee hee).

[Al Kida]

sure does :D

[Lex44]

Really...? I smell cynicism.
What I didnt like about SAA is their luggage handling on more than one occasion. Talk of luggage dismembered. Do they break this at will or is the rower sabotaging the boat. Somebody's going to drown. Hear the management have life jackets. Huh!

[Frogman1484]

yes but they do have a good website...got best website to Africa award...wow!!!

[FUG]

SAA executives set to take flight
Simpiwe Piliso Published:Jun 10, 2007

--------------------------------------------------------------------------


South African Airways is bracing itself for a spate of high- level executive resignations in the next few weeks.

Business Times has established that at least four of the airline’s 11 executive members have indicated that they intend to submit their resignations next week.

Some members of the executive team raised concerns about SAA’s cost-cutting plan at an executive committee meeting on Wednesday.

During the meeting, they collectively indicated their intention to resign.

But on Thursday and Friday, SAA chief executive Khaya Ngqula approached the executives individually to discuss their grievances and persuade them to stay on.

It was reported this week that the company’s chief financial officer, Gareth Griffiths; chief risk officer Vishnu Naicker; general manager tasked with restructuring, Nomfanelo Magwentshu; and legal counsel Louisa Zondo, had all told Ngqula of their plans to leave.

The four executives could not be reached for comment on Friday on whether they were negotiating to leave the company.

Analysts this week said the departure of these executives would hamper the progress of the cash-strapped national carrier’s plans to introduce cost- cutting measures to save R2.7- billion in the next 18 months.

SAA spokesman Robyn Chalmers declined to comment.

“Nevertheless, restructuring is unsettling for many staff members and companies tend to lose some of their best people. SAA is looking into ways to retain people across the board as part of a strategy of ensuring we don’t lose those we need for operations,” Chalmers said.

The airline has lost a total of six executives since Ngqula took the helm more than two years ago.

Analysts have warned that the latest “unsettlement” and other continuing concerns at the airline could result in Public Enterprises Minister Alec Erwin demanding Ngqula’s resignation.

Chalmers confirmed that three lower-based managers — insurance head Pravin Nair, compliance head Andy Mothibi, and business risk head Reg Haman — had resigned in the past two months.

SAA also warned last month that up to 1000 retrenchments would be unavoidable — and about 180 of SAA’s 600 managers would be retrenched.

Negotiations with the unions are scheduled to start this month.

[cavortingcheetah]

:ooh:

A little off topic perhaps but today's Flight International carries this story on page18. No doubt there will be losses among key staff such as senior pilots?

SAA is to ground its 747-400 fleet, revamp longhaul and split into seven units as a part of a wide restructuring plan that aims to restore profitability within eighteen months.
The airline has six remaining 747-400s, five leased, one owned.
CEO Khaya Ngqula said:

'In the face of a high cost base created by uncompetitive ownership, aircraft lease costs, excessive headcount and fuel price volatility, SAA must overhaul its entire business if it wants to survive.'

Is it overly cynical to wonder aloud if there is an ulterior motive afoot here? A plan to sweep away some of those pilots who have been in SAA the longest in order to replace them from the bottom with others whose appointments might have, how shall one say, a tad of the political about them? :rolleyes:

[ByAirMail]

This is interesting to watch. Amazing to notice how absent the staunch S.A.A. flag waving Fluffy fan and Jetnut (amongst others) are. Must be very busy updating those C.V’s.

Found it very interesting that S.A.A. is cancelling their Paris flight’s 2 month’s before the Rugby World Cup, while Air France is laying on extra flights. Guess that summarize the management potential.

[JetNut]

ByAirmail...

Shame. You really do have a serious chip on your shoulder after that dreadful interview in 1999.

Remember, your fellow aviators are not the enemy here. (Maybe that's why you didn't get the job in the first place, try to get over your paranoia mate, nobody is conspiring against you)...

But, if SAA closes down I'll be gunning for your job :}

[4HolerPoler]

Cool it JetNut - the guy's got a point - what kind of airline closes down a route to a destination where a World Cup event is being played right before the event?

The word palooka's springs to mind.

4HP

[Frogman1484]

You will be surprised on what a little impact the Paris flights during the world cup has on the bottom line.
The same goes for the soccer world cup. On the big picture it will be a short lived increase in loads at reduced yields that will not have a long lasting impact on the aviation scene. Look at Sydney after the Olympics, Seoul after the world cup etc etc.

[ByAirMail]

Dreadful interview in 1999….now we would never know if it was dreadful will we Jetnug. Because your organization did not even have the common decency to advice people after their interviews of their status.. but maybe it was dreadful because I wore Garfield socks, and no jacket as it was 30 deg. outside.
I have never attacked my fellow aviators, ( exept for you and fluffyfan, after you had a go at us "non-S.A.A. infidels" ) unlike you on numerous previous threads.
I would love to have you in our organization, it will give you a really good insight in how an airline should operate, but unfortunately judging by the personality you have displayed on numerous pprune threads you would not make it past the first interviews.
Talking about chip on the shoulder ( a phrase you have used often before ) You must be pretty well balanced, seeing that you have a chip on each shoulder.

[fluffyfan]

ByAirMail just a quick response

The Paris route is operating until after the world cup, only then will it be closed down, because they cannot make a profit on that route due to low passenger numbers.

I thought that would make all you SAA bashers happy, SAA making a decision about profit.........imagine. Now although it does not make me happy to see SAA shrinking I do think that the only way forward for SAA it to restructure and wean itself off government funding, I think you may find we have similar views, so the short term pain at the present moment will hopefully be rewarded buy long term gain, but who knows, it depends on if the government is going to interfere or not.

As for the personal attack, not sure how I have offended you, I cant remember putting down the "Non -SAA infidels" but I am sure you will do a history search and find something said somewere, just bear in mind that whenever SAA is mentioned on this forum the crazies (much like yourself) come out the woodwork and start attacking, so excuse me if I happen to have defended my position a few times. As for CV's........no thanks I am quite happy where I am.

[ByAirMail]

At least it is comforting to see we are starting to agree on some things Fluffyfan. Restructure and profitability at S.A.A. is the only way to go, not only for the survival of S.A.A. , but also the good of aviation in S.A. So we are not the crazy’s, maybe more like the "keep them honest brigade" as this is what we have been calling for all along.....the weaning from government.
Good to hear the Paris flights are continuing till later, as the Sunday papers mention ending at the end of the month, I will take your word over a reporter any day. These flights, apart from a very small spike in profit as Frogman mention, if well managed, can do a lot for goodwill from the public, something that is needed as badly as cost management.

[Beta Light]

If Air France can increase their flight's, why not fill a S.A.A. flight (SA Rugby magazine, April 2007 page 121 - JNB to Paris 14 flights per week from April ) (www.airfrance.co.za )
Keep the current slot's... once you lose them it is hard to get them back. There is still time to turn this route around as the demand is obviously there.

P.S. As I am looking at the cheapest way to go to the world cup I buy all the relevant magazines and have not seen a S.A.A. ad as yet. Advertising will be the wrong place to cut cost.

[JetNut]

ByAirmail.

SAA pilots are just passengers in this one. Trust me , if we ran this airline you'd have nothing to whinge about, so in a way our management's incompetence is your gain, it gives you something to bitch about in the pub, otherwise methinks you wouldn't have a life.

Since its your hard earned tax money (are you paying tax?) paying our salaries (which we obviously don't deserve in your opinion), its probably fair for you to be highly opinionated about an organisation you've never worked in. I don't go around bashing pilots flying for Cathay, because I have no clue what their conditions of employment are, so maybe you can borrow one of my chips and learn something.

However, once again it is people of your callibre/personality trait/reasoning/attitude that makes being a pilot embarrassing, this sour-grape syndrome of yours is getting kinda stale.

PS. 4 holer poler - this is not a personal attack on Byairmail, but merely a humble opinion on a public forum. Also note, my friend wanted my opinion by asking for me in a previous post, even though I decided not to make any comments for awhile as this forum was becoming very depressing, especially when there's more important things to worry about, like the murder of innocent children in Iraq, instead of wasting energy on narrow minded individuals with a warped sense of reality living in luxury apartments.

[Capetonian]

On a wing and a plan

Jocelyn Newmarch



12 June 2007 11:59

South African Airways’ profitability and market share have declined at a time when air passenger numbers have more than doubled. This brings more urgency to SAA’s restructuring plans, amid concerns that the transformation of an ailing airline will not go far enough.

On Monday SAA unveiled its plan to achieve a R2,7-billion turnaround aimed at restoring the airline to profitability within 18 months. Public Enterprises Minister Alec Erwin warned that further state support depended on the plan’s successful implementation. SAA will ground six Boeing 747-400 planes, five of which it is leasing, close its Zurich and Paris routes, cut 30% of its management staff and “renegotiate working conditions”. The airline was coy about retrenchments, emphasising that it had not yet opened negotiations with staff unions. It will reshape its business into seven separate subsidiaries and will sell off its catering unit and travel industry platform Galileo.

It is no secret that the struggling enterprise has required a series of government bail-outs. In March this year alone, government injected another R1,3-billion of capital alone. But the sheer scale of SAA’s underperformance becomes clear only when examining the extraordinary growth of the South African market.

Last year 15,8-million people flew in South Africa, from 7,5-million in 1999. These figures, provided by economist Mike Schussler, include international, regional and domestic flights and show that the market has more than doubled.

Statistics from OR Tambo International Airport tell a similar story. In 1992 the airport saw fewer than three million arrivals. By the end of the 2006 financial year this had grown to 7,97-million. This growth was initiated by the launch of kulula.com and 1Time, both private-sector airlines.

But, at the same time, SAA’s market share has declined to 39% from almost 100% previously and the airline has struggled to make a profit, according to Schussler. “If it’s been this unsuccessful in a growing market, one dares not think what SAA would look like if interest rates went up,” he said.

During the unveiling of its restructuring plan, it emerged that SAA’s African routes are the most profitable part of its business, adding R500-million to the airline’s bottom line last year.

“SAA is traditionally strong on routes where it does not have much competition, such as on the African routes, and that can be put down to the management structure,” Schussler said.

At present SAA is Africa’s largest airline, but there are concerns that it would not be able to compete if African countries liberalised their aviation policies. SAA CE Khaya Ngqula identified delays in African liberalisation and an open-skies policy -- where airlines are free to choose how many flights are needed -- among the threats facing the airline.

Schussler believes the airline is overpriced in relation to its competitors and that cheaper flights bring in tourists with more money to spend in South Africa. At present much of SAA’s competition is domestic and provides jobs for South Africans, but must compete against an unfairly subsidised business. The lease agreement between SAA and Mango has not been made public, raising the question of whether the new subsidiary’s losses are being hidden in its parent’s balance sheet, he said.

Rival airline Comair takes a somewhat different view. Its CEO, Erik Venter, estimates SAA’s market share at 50% of total, as its wholly owned subsidiary, Mango, holds 12% of the market. “It’s hard to judge whether it [the restructuring] will make any difference,” he said. “There are more fundamental issues than what they are talking about.”

SAA decided to ground its 747-400s because of high costs, but many airlines, including British Airways and Virgin, successfully use 747s on the Johannesburg to London route, Venter said. International airlines receive a higher proportion of revenue in hard currency, compared with SAA, which makes it harder for the airline to compete globally. “They are pursuing a market share that’s too big for their cost structure,” he said.

If SAA does decide to retrench, it comes at a good time for their workers, said economist Iraj Abedian. With a booming economy, workers would be offered a retrenchment package and would be likely to get a job offer from another company with relative ease. Schussler agreed that retrenchments would release skills back into the economy, but added that the take-up of retrenched employees would depend on the specific skills they could offer.

The airline has a total staff complement of 10 085, including 698 managers. This means that, if the 30% management cut is carried through, at least 200 managers will be sending out CVs.

Venter agreed that retrenchment would not necessarily be a solution. In Comair’s experience, SAA typically pays its staff between 30% and 50% more than anyone else in the industry, underlying the need to look at total remuneration packages rather than retrenchments. “It’s not the number of staff so much as the level of expertise. There’s been massive turnover in top management. There might not be enough expertise left in the airline to take good decisions,” he said.

[Avi8tor]

I have said it more that once, but will say it again.
Get the government out of airlines!!

Remember, your fellow aviators are not the enemy here. (Maybe that's why you didn't get the job in the first place, try to get over your paranoia mate, nobody is conspiring against you)...
But, if SAA closes down I'll be gunning for your job

Just because people have the interest of the WHOLE industry at heart doesn't make them paranoid. I have a feeling that its the group that are protecting their self interest at the price of the rest that are paranoid.

If SAA announced that it was so close its doors. I bet it would take less than 24 hrs before the routes would be taken over. This time profitably. The airline would expand, and there would be MORE jobs for you guys.

[Frogman1484]

I think if SAA should close down , yes the routes would be taken up in 24 , but not by a South African company.

All the spare SAA pilots looking for jobs in SA would tend to drive salaries and conditions down for everyone in the industry...you are all arguing market forces here right!

The age of the average aircraft operated in SA is probably 30 years old if not older, so just on operating costs I cannot see how they will even be profitable.

I think you will all be better off with SAA restructuring and still existing in the african avaition industry.

[Avi8tor]

I have to disagree. The problem is not the demand, we all know the aircraft are full. Its the cost structure.

The routes are protected in South African hand by the bilateral agreement. So NO foreign carrier could own more than 49% of the new airline.

The old vs new aircraft debate runs around capital cost vs fuel/maintainance. Watch what happens when crude oil hits $80 a barrel.

You are right about supply and demand. If SAA went 'tits up' and the routes were restructured in private hands, initially the new operating effiecency's would lead to a few guys being out of work.

The world wide demand would swallow them up in no time. Then as the profit making airline expanded, the shortage of experienced pilots would drive salaries up and create more new jobs than were lost.

A little short term pain for long terms gains.

[Frogman1484]

Aviator I think your underestimating what another 600 qualified pilots will do to an industry in SA. Also not all of the pilots from SAA will want to go to the sand pit or to the Far east, I think that the ones that wanted to go have already left long ago.

I also do not understand on how an extra 600 pilots will put pressure on the operators to increase salaries, if anything , they will come down due to an oversupply. Once they have all jobs maybe we might still be in a pilot shortage scenario, but that will take a long time.

The other thing is that any new operator will have to set up first get all of the certificates in place etc etc which all takes time.

You can take the domestic portion of SAA being divided up by the local players probably with no or a slight increaser in Airframes. The international portion of SAA will very quickly go to the seats of other airlines.

What will a new airline have to get in order to take over SAA's international loads and be able to compete with the likes of BA SQ VR CX etc. Will they have to buy A340-600, maybe a few 400's or a couple of 777's. Well if that is the case. Does it not make more sense to restructure SAA as it already have an AOC route agreements and frames.

[Avi8tor]

You are assuming that the SA end of the bilateral doesn't operate, should SAA go tits up. That cant happen.

Remember BA/VS/LH cant just keep uping frequency. The foreign end of the bilateral for almost all international routes are taken up. It's SAA piss poor performance that is stopping the expension on the SA end.

I still maintain that if SAA announced that it was to suspend operations as of 30 june, by TOMORROW somebody would be howling for an Air Services Council meet so they could get route rights.

Most of the leases for SAA's planes would have been renegociated and some of the staff rehired. Given, at lower salaries. Sure some fleet rationalation would take place etc. But in a short space of time, things would be bigger and brighter than before.

I am afraid while the government is a shareholder, you will never get rid of the 'culture of entitlement' that exists. Economics will dictate which of the staff at SAA take a pay cut/increase in productivity or find jobs elsewhere. Sadly what they 'want' is not the taxpayers burden.

The management is powerless to make the changes it needs to, because the unions can bring the whole place to a standstill in no time. And that will cost way more than what they are trying to save. Look at the cabin strike last yr.
If however the unions know that if consessions are not made, they will loose there jobs due to bankrupcy, a new attitude will prevail.

I am afraid the restructuring is doomed to fail. The actions that they will have to take are just to dreadful to contenplate. The government doesn't have the political will to see it through.

As a result, it will be 'deck chairs on the titanic' stuff.

[JetNut]

Av8or...

I do agree with you on the fact that the restructuring is doomed to fail. The reson: a classic case of the cock-eyed (literally) leading the blind. SAA top management are the most incompetent in the airline world today.

While every real airline in the world is growing with serious expansion plans, this company is going through a divestiture and cost-cutting turnaround. When will growth ever happen...I'll tell you, NEVER, because it's not in synch with macroeconomic trends.

Any first year business science student will tell you that something's fundamentally wrong here. How do you expect to turnaround a parastatal by doing only the most basic of things, such as reducing assets and eroding employee benefits. A sustainable turnaround strategy leading to growth and therefore improved profitability can only be achieved by improving the position of a company's assets through innovative thinking. Throughout the modern world this is done by cleverly reducing debt and increasing equity investment. When delta came out of chapter 11 they achieved it by canvassing and obtaining six large investments from high risk private equity firms.

At this stage SAA is on a suicide mission. When this turnaround fails the only next step in the business life cycle is to declare bankruptcy. But, I'm quite happy that I'll still be flying awesome aircraft, because the govt. will never declare bankruptcy, this is a measure of failure in South Africa. The government will simply inject another 1 billion rands and appoint a new bunch of morons to run the circus on the sixth floor.

While the pilots will bang their heads against the walls asking why.

Some people like DeskJokey might ask who the hell am I. Well, I'm a lowly junior first officer at this company, but with an impressive academic background, which means F-All at this organisation because everything's based on seniority. So what does this mean for me... another 15 years before command.

Remember the Titanic....and the band played on.

[Avi8tor]

I have to agree with you, SAA should be expanding!! It should be expanding at between 5 and 10 precent per yr. Thats like taking delivery of 3 to 5 new planes a yr!!!

And that has been the point of my posts. It is not in the interest of the staff or the industry to keep it in state hands.

You cant expand yourself out of the dwang. They have tried that before. The managemnet have to get the fundementals of the business sorted.

Delta and all the other US airlines went through a major cost cutting exercise. That included, but was not limited to the staff taking a 40% pay cut and loss of pension benifits. That included pilots.

For a senior captain it was like $90k. Some how i dont see that happening at SAA.

No bank is gonna issue junk bonds to bail SAA out while the costs are runaway. The management is not gonna get the costs down without the buy in of the staff. And the staff know that the government will never pull the plug. Catch 22.

But without the cost cutting, its titanic stuff.

Thats Business Economics 101.

[fluffyfan]

Jet Nut
perhaps you should refrain from making statements like this
Well, I'm a lowly junior first officer at this company, but with an impressive academic background, which means F-All at this organisation because everything's based on seniority.
It makes you look like a doos.
You seem to have all the answers, maybe you should scoot on up to the 6th floor and tell them how clever you are, I am sure they will bypass the seniority system in your case and award you command, maybe you could show the consultants a thing or two.

[Al Kida]

"maybe you should scoot on up to the 6th floor"

Go on, why dont you do that, after all, there was once a F/O who became DFO. :8

[Avi8tor]

hmmmm... thats a little personal.

If you dont like his views, calling him names makes you look like you belong in the 4th grade.

This is a discussion forum, he can say what he likes. The general idea is that if you dont agree with what he says, you put across your point of view as to why you think he is wrong,

[CJ750]

What is exactly wrong with Jetnut's statement you quoted in your last reply. :confused:

[journeyman]

I think what fluffyfan is saying is that even though JetNut may have a cranium to rival Stephen Hawking's - he was hired as a F/O, period. Nothing more, nothing less.

If he was so impressed with his intellectual prowess, perhaps he should've applied for a position within the airline that would have afforded him the opportunity to effect real change. It's not too late - remember when Mark Keohane applied to become Springbok coach? (Okay, he didn't get the job because he had no actual coaching experience, but he wrote a good column for one of the regional newspapers. Getting the picture yet?)

To JetNut's credit, he was however pragmatic enough to recognise his probable fate should he choose to stay with SAA, i.e. 15 years with 3 bars. The name-calling was a bit harsh, though.

[CJ750]

Thanks Journeyman but as AV8tor said it does not warrant Fluffyfan calling Jetnut a BOX. I think an apology is in order or is that language allowed these days.

[fluffyfan]

CJ750 so sensitive.....you poor sweet sole.
My comment to Jet Nut was based on the fact that he implies that he has some intellectual advantage over his fellow pilots at SAA and this should be taken into consideration, he seems unhappy with the seniority system in place there. Its precisely that seniority system that is protecting the pilots from all sorts of abuse, the government would love to bypass the seniority system based on skin colour.
Just ask your friends in the desert how they feel about direct entry command and people bypassing the seniority system. When you join SAA you know what the story is and you live with it or you can leave and look for a quick command if it is really that importaint to you. As for Jet Nuts comment about his impressive academic background, that is just plain arrogance, he should look at some of his colleges in the airline the list of impressive achievements is a long one, from guys who started out flying students in 150's for thousands of hours and eventually worked there way up to Command at SAA, guys who have flown in the military for many years and done the same, as for his impressive academic achievements there are approx 50 or so pilots at SAA with Degrees in Engineering from Mechanical to Aeronautical, so maybe Jet Nut should eat some humble pie and learn to live with the Seniority system that does not care about what degree you have or what you did before you got into SAA.

[Al Kida]

well said fluffyfan:D

[Frogman1484]

YAWN!!! Can we now get back to the thread?
:O

[MrBernoulli]

It would not surprise me if one of the covert reasons for the 'disruption' being caused is to ensure the departure of significant numbers of 'wit mense'. It won't be the primary reason or only reason, but it will be a spin-off that will be welcomed by the 'majority'. Same thing happened in Zimbabwe. Don't tell me you never swaw it coming?

[Deskjocky]

Some people like DeskJokey might ask who the hell am I. Well, I'm a lowly junior first officer at this company, but with an impressive academic background, which means F-All at this organisation because everything's based on seniority. So what does this mean for me... another 15 years before command.


I don’t need to ask that question, you’ve already answered it!:}

At this stage SAA is on a suicide mission. When this turnaround fails the only next step in the business life cycle is to declare bankruptcy. But, I'm quite happy that I'll still be flying awesome aircraft, because the govt. will never declare bankruptcy, this is a measure of failure in South Africa. The government will simply inject another 1 billion rands and appoint a new bunch of morons to run the circus on the sixth floor.


Big assumption, hope for your sake- you are right. The reality is that for the first time the government now has a plan B or is that plan M…..?:suspect:

[JetNut]

Yep,

A plan B..S

[JetNut]

DeskJokey,

Here's an idea for you. Put an ad in the Sunday Times appointments section for qualified senior managers (who actually have degrees) and then attempt to hire on merit.

[Deskjocky]

JetButt,

Thanks for the advice- perhaps we may be extra lucky and land an intellectual giant like you:ok:

[Frogman1484]

let me try and stop the name calling here.

If SAA was to wind down which SA player would have the money and backing to take over the international side of the business.

Or do you think that the government will move to an open sky policy and let the big internationals take it up to keep the important tourist dollar coming in.

:}

[JetNut]

SA have already granted guys like emirates 5th freedom rights. With open-skies becoming the norm in the EU and transatlantic route begining March 2008, open-skies in Africa is inevitable.

In this case the consumer wins.

Things in the aviation world are going to look very different come 2010 and beyond.

[Avi8tor]

5th feedom rights to EK? You sure? When?

UAE has open skies policy, was not aware SA had reciprocated. That would be a 1st. Couldn't do it within africa, let alone the mid east.

And dont worry, the government has NO intention of letting SAA go broke. Thats why this restructuring(again) is doomed to fail. What they could do is create more 'mango' type business entities and spin the pieces off to them.

Then sell off the smaller entities as black empowerment vehicles. So SAA slowly gets smaller and smaller till it just dies a natural death.

The only real issue for a domestic carrier to step up to the plate would be the IATA deposit for the clearing house. That issue could be avoided if the SA/083 code could be 'transfered' with the route rights. Or just skip the clearing house and go online. Just a mess with interline traffic.

Mr Boeing/Airbus have large banks that travel with them when the sell aircraft. I suspect it would be a matter of fleet and lease restructuring.
Remember its not a matter of route building, the cash flow is there. Its just taking over proven routes with a better business model.

[ERASER]

Well its out in public domain, SAA posted a loss of R883 million. :eek: :{

[JetNut]

NEWSFLASH:

SAA has signed a MOU with Airbus for the purchase of 5 A350's, as part of the restructuring recapitalisation.

[AAL]

SAA management are not incompetent, they just purely and plain and simply know nothing about aviation. The few catchphrases and jigles dont constitute proper management. Monkey see...monkey do...how many more chances do they need?

Sorry Deskjocky, this goes for any also who tries do defend them.

[bianchi]

NEWSFLASH:

''SAA has signed a MOU with Airbus for the purchase of 5 A350's, as part of the restructuring recapitalisation.''

Sorry drifting of the thread topic here for a second,but if my memory serves me right,did'nt SAA pay deposit to the B company for some 777's which they never got due to some minor hic-ups re''who will get how much out of the deal''?So my''gut feel''say that signing a piece of paper will hold even less commitment(water) !!! Just a thought !!

"Talk is cheap,but money buys the Whiskey''

[SAA201]

What is the source of this "Newsflash" please. There is nothing about this on the official Airbus website.
Or is this a rumour? Please specify...

[SAA201]

The only Memo of Understanding on the Airbus website that was signed today (29 June 2007) is by TAM for 22 A350's.

[oerlikon]

I once heard an SAA pilot say that if you cut the top levels of management off to just above the pilots the company would make a profit. Is this true?

[MarkD]

oerlikon

which airline isn't that true for :D

[oerlikon]

A profit making one?????

Been shot down in the past for sniping at SAA, seems you can't say what's true until it comes out on the news!

(Not so 4Hp)

[ERASER]

In the news paper today : SAA begging for just another 4 billion to keep going.................:(

Seems to be hinting on new a/c...........believe KN is on his way to Boeing this week.............maybe going to talk about taking up their offer to buy all or some of the "busses" and replace them with Boeings :confused:

E

[Frogman1484]

That's not going to help. The next 787 delivery is in 2013. Not sure for the 777, but will no be soon either.