NUMSA and SACCA welcome the resignation of Martin Kingston from SAA Board
17 January 2020
The National Union of Metalworkers of South Africa (NUMSA) together with the South African Cabin Crew Association (SACCA) welcome the resignation of Martin Kingston from the board of South African Airways (SAA). We view this as a positive step and we call on the rest of the board to do the same and resign immediately. This board has been directly involved in the destruction of SAA and it is because of them that SAA has now been placed under Voluntary Business Rescue. SAA has collapsed because of corruption and mismanagement. Its finances have been choked by the R25 billion per annum spend on procurement, caused by evergreen contracts with big multinational companies. The board has done very little to intervene in corruption, and to curb the bloated procurement spend.
Furthermore, the recent decision taken by SAA management to sell aircraft whilst the Business Rescue Process is underway is deeply suspicious and we demand that both the board and the Executive management must publicly account for that decision.
It is standard practice that for any asset to be sold or purchased, SAA must inform and consult the Labour Forum. Even when routes are changed they consult Labour. Therefore, it is deeply disturbing that SAA can announce the sale of aircraft without consulting or informing workers. This is worsened by the fact that the Business Rescue Practitioner knew nothing about this sale.
Aircrafts are owned by SAA, but components and spares are owned by SAAT. If SAA wants to dispose of assets, then meetings with the bid committees of both entities must sit and take a decision. Furthermore, the SAA board must produce the resolutions taken at board meetings last year to justify the sale of these assets. We demand copies of the transcripts of the board meetings, and the memorandum of incorporation which would give them the right to dispose of assets of SAA. We also demand reports from the bid committees which reflect this process.
We suspect that the board and the executive are selling all of SAA’s assets so that nothing is left, and it remains a shell by the time that Business Rescue is implemented. If this is true, then the sale of the aircraft is another demonstration of the rampant looting and corruption which has brought SAA to the point of collapse. And it is for this reason that we also demand the immediate suspension of the entire SAA senior Executive leadership starting with the GCEO, and all her colleagues, pending an independent investigation into the sale of SAA’s aircraft.
GOVERNMENT MUST MAKE FUNDS AVAILABLE FOR SAA BUSINESS RESCUE
We are concerned about the fact that government has not yet provided SAA with the working capital of R2 billion which it needs in order to remain operational. We view this as a demonstration of extreme negligence on their part. The Department of Public Enterprises announced on the 5th of December that SAA was undergoing Voluntary Business Rescue. From that moment when the decision was taken, the minister of Finance, Tito Mboweni should have taken steps to ensure that money was made available for operations at SAA in the months of January and February 2020, but he failed to do so. Should we interpret his failure as deliberate given his attitude towards the airline?
Mboweni has been very public regarding the future of SAA. He has deliberately devalued the airline on various international public forums and called for its immediate sale to the private sector. We reject the explanation given for the delay in the payment. Given his attitude, if funding is not provided for the airline, then we will know for a fact that his intention all along has been the deliberate destruction of the airline through liquidation.
We call on Mboweni to do his job and put his personal feelings aside. We urge him to be a patriot and save jobs for the benefit of all South Africans. It is grossly irresponsible for any Finance minister to advocate for policies that will ultimately result in more job losses, especially given that our unemployment rate is shockingly high, and our economy is not creating more jobs.
SAA CAN BE TURNED AROUND
NUMSA and SACCA have always believed that under the right leadership, SAA can be turned around. What is also bleeding the airline is the cost of operating leased aircrafts especially in the international market. Under the leadership of Vuyani Jarana, the former GCEO, as unions, we were engaged as key stakeholders in working together to find solutions to this challenge. In the various engagements we have had with him, he had plans to pursue a commercial Joint Venture with Air Mauritius and Ethiopian Airlines in order to address the inefficiencies in the leased fleet.
The significance of such a deal not only would bring greater economies of scale and efficiency to SAA but would ensure that SAA has access to traffic rights that would be mutually beneficial and would set a precedence for the rest of the continent. This is a viable strategy which does not involve the sale of SAA’s assets. It is a plan which we have presented to both the President of the country and the Ministry of Public enterprises. This is why we have been pushing for Jarana to be appointed so that he can be involved in the Business Rescue process, by assisting with implementing this proposal. We urge the President to provide leadership and make a firm commitment to rescue SAA in order to make it viable again. SAA can be saved, all that is needed is political will to put it back onto the path of recovery.
Issued by Phakamile Hlubi-Majola on behalf of NUMSA and SACCA, 17 January 2020
