SAA extends flight cancellations till Monday

By Mike Cohen and Paul Vecchiatto

(Bloomberg) – South Africa Airways extended flight cancellations to four days as a strike over pay and job cuts at the loss-making state carrier got under way.

Regional and domestic routes will remain suspended through Monday, two days longer than previously announced, the airline said in an emailed statement on Friday. International services will resume on Nov. 17, it said.

Two labour groups representing more than 3,000 SAA staff called the strike starting Friday after the airline announced plans to cut almost 1,000 jobs and rejected union demands for an 8% wage increase. SAA, which has offered a raise of 5.9%, estimates the strike will cost it R50m ($3.4m) a day and has warned the walkout puts the entire business at risk – a threat the unions have shrugged off.

“The strike will go on indefinitely until our demands are met,” said Phakamile Hlubi-Majola, spokeswoman for the National Union of Metalworkers of South Africa. “Our members have come out in numbers. We would argue that the strike has definitely been successful.”

Mediation effort

SAA and union officials are due to hold talks on Saturday that will be mediated by the Commission for Conciliation, Mediation and Arbitration.

Financial markets shrugged off the threat the strike poses to the economy, with the rand gaining as much as 0.5% against the dollar on Friday.

Cape Town International Airport was calm on Friday morning as passengers heeded SAA’s calls to stay at home or make alternate travel plans. A group of about 70 unionists protested peacefully outside the terminal buildings.

“SAA only makes up about 15% of the daily flights in and out of Cape Town and, so far, all the other airlines are operating normally with 90% of those flights on schedule,” Diedre Davids, the airport’s spokeswoman, said in an interview. Staff are assisting passengers who need help changing flights and so far there hasn’t been any disruption, she said.

Minimum disruption

Arrivals and departures of non-SAA flights are proceeding at close to normal levels at other airports, with disruptions kept to a minimum, Airports Company South Africa, which operates the terminals, said by email.

SAA said it is working with Mango Airlines, the carrier’s low-cost arm, to transport customers on its domestic services, and with partner Airlink and other carriers where possible to other destinations. Not everyone could be accommodated, the company said.

The flight cancellations are costing the airline more than meeting the workers’ wage demands, and it could save money by halting the hiring of outside contractors to provide services such as security and cleaning, Hlubi-Majola said.

“This management is not really showing it is trying to find a way to save the airline,” she said. “As unions we want to resolve this strike. We want to come up with an agreement that will suit everybody.”