South African Airways inks deal to end eight-day strike

JOHANNESBURG (Reuters) – South African Airways (SAA) signed a wage deal with trade unions on Friday to end an eight-day strike that brought the cash-strapped state airline to the brink of collapse.

The logo of South African Airways (SAA) is seen on an aircraft at O.R. Tambo International Airport in Johannesburg, South Africa, February 14, 2019. Picture taken February 14, 2019. REUTERS/Mike Hutchings/File Photo

SAA said it would restore its flight schedule to normal over the weekend and promised to delay talks with unions on job cuts until the end of January.

Three of SAA’s largest trade unions agreed to a 5.9% pay rise for the financial year that began in April, with the first salary increase in February 2020 and back payments in March and April if the airline has sufficient funds.

That was a similar deal to the one offered before two of the unions launched a strike on Nov. 15, making it a victory for SAA and government officials trying to curb steep financial losses at the airline. Some airline staff had returned to work during the strike as they were not paid while out on industrial action.

The South African Cabin Crew Association (SACCA) and the National Union of Metalworkers of South Africa (NUMSA), the unions that led the strike, had pushed for an 8% salary increase.

Workers belonging to another union, the National Transport Movement, which didn’t participate in the strike, will receive the same 5.9% increase.

“We are therefore pleased to announce that we are calling off all strike action at SAA and SAAT (South African Airways Technical) with immediate effect, due to the fact that we have settled on a wage offer,” the unions said in a statement.

SAA said it would operate a near normal flight schedule on Saturday and a full schedule on Sunday.

The strike had cost the airline about 50 million rand ($3.41 million) a day.

South African President Cyril Ramaphosa has made turning around ailing state companies such as SAA a priority as he tries to revive economic growth and steady the country’s public finances after a ruinous decade under his predecessor, Jacob Zuma.

He has found it hard to make much headway, given fierce opposition from unions and a broad cross-section of society that is deeply suspicious of moves that could weaken the hand of the state in the economy.

But there have been some signs recently that officials are starting to take a tougher line on loss-making state entities.

Public Enterprises Minister Pravin Gordhan said this week that the government could provide no more financial support to SAA, after more than 20 billion rand ($1.4 billion) of bailouts in the past three years.

SAA has pleaded for the government to sanction more state guarantees to allow it to unlock new bank loans, but so far those guarantees haven’t been forthcoming.

Earlier this month SAA said it could cut almost 20% of its 5,000 employees.

Investors and ratings agencies want to see evidence that the government is serious about tackling runaway spending.

S&P Global Ratings, one of two agencies to have South Africa’s debt in sub-investment grade, is due to publish a rating review later on Friday.

($1 = 14.6633 rand)

Reporting by Alexander Winning and Emma Rumney; editing by Edmund Blair/Jason Neely/Susan Fenton

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