Two trade unions, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) have jointly welcomed the announcement that the government is to provide funding of R10.5-billion to financially-embattled State-owned national flag carrier South African Airways (SAA). This allocation is to finance the implementation of the business rescue plan for, and the concomitant restructuring of, the airline. The unions also attacked critics of this decision.
“We had hoped that the capital injection had been injected sooner to limit the untold suffering which workers and their families have endured in the process,” said the unions in their statement. “This funding came at great cost to workers at SAA. They have lost out on at least eight months of their income because of the long drawn out business rescue process, which government initiated voluntarily.”
Numsa and Sacca also pointed out that, under the business rescue plan, 3 200 employees of the airline would lose their jobs. The relaunched SAA would have only 1 300 staff. “So far,” they stated, “workers and their families have paid the highest price for a restructured airline”.
The two unions attacked the official opposition in Parliament, the Democratic Alliance (DA), and non-governmental organisations (specifically naming the Organisation Undoing Tax Abuse, or OUTA) for their opposition to the latest funding for SAA. They observed that many countries had State-owned companies that were “key” to their economies. They specifically cited China as an example, noting that the majority of the 124 Chinese companies on the Fortune Global 500 list were State-owned.
They also observed that China has mobilised its State-owned companies to build new hospitals in a matter of days, as part of that country’s response to the Covid-19 pandemic. “This is clearly a validation that there is nothing wrong in being State-owned,” affirmed Numsa and Sacca. “What matters is how government as a shareholder manages the asset.”
In the case of SAA, the South African government had, the unions charged, been a delinquent shareholder. It had undercapitalised the airline, run it as if it was a government department and not a commercial operation, appointed incompetent board members and weak executives, interfered in SAA decision-making and allowed corruption to run unabated.
To avoid a repeat of this situation, the two unions demanded that a competent board and executives be appointed to run the airline. They also demanded that SAA be exempted from the Public Finance Management Act, to give it the flexibility to function like a commercial enterprise. Furthermore, in future government must not extend loan guarantees to State-owned companies but rather capitalise them properly, when required.
“From an ideological, commercial and logical standpoint, we strongly disagree with those who say SAA must cease to exist,” asserted Numsa and Sacca. “SAA is not just an airline, it is a [State-owned entity] whose purpose is to grow the tourism and aviation sectors in the country. … We condemn both [the] DA and OUTA with the contempt they deserve for their cold-hearted recklessness. Every job is worth saving in South Africa, and that should be the attitude of all progressive people who care about the future of this country.”