South Africa faces new battle with unions over airline wages

Bloomberg

South Africa faces a fresh battle with labour groups in its effort to revive the bankrupt state airline, offering three months of wages to employees who haven’t been paid since March.
The government’s Department of Public Enterprises (DPE) and the National Union of Metalworkers of South Africa were scheduled to discuss the
matter, according to a spokeswoman for the labour group, only for the state to call it off. Numsa and the South African Cabin Crew Association, another union, had expected members to be paid in full, in line with the country’s legal framework for a business-rescue process.
Numsa can’t yet say if it will accept or reject the three-month offer for South African Airways (SAA) staff, spokeswoman Phakamile Hlubi-Majola said by text message. “We can only say that the DPE must not forget that workers have made major sacrifices,” she said.
The new flareup represents another barrier to South Africa’s plan to get SAA to fly again, about a year after the loss-making carrier first went into bankruptcy protection.
While administrators published a rescue plan in June, the state has struggled to source the required funding and a search for an outside investor has been inconclusive.
The effort has been made significantly harder by the Covid-19 pandemic, which has hobbled both state finances and demand for international air travel. SAA hasn’t flown a commercial flight since March, when its fleet was grounded to help contain the coronavirus.
The administrators calculated that 2.2 billion rand ($147 million) would be needed for employee costs, which included both back payments for those sidelined and voluntary-severance packages. The new SAA is seen having a workforce of about 1,000 employees, down from about 4,800 before going into bankruptcy protection, a reduction agreed to by most labour groups in July.
Finance Minister Tito Mboweni allocated about 10.5 billion rand for SAA from other state budgets in October, and 1.5 billion rand was transfered at the start of this month. However, the administrators say the cash can’t be used as the government attached conditions that breached labour and companies regulation. About 1.2 billion rand is needed to pay back salaries, according to their spokeswoman.