March 9, 2020 / 4:26 PM / a month ago

UPDATE 1-South African Airways to begin talks on job cuts -rescue team

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JOHANNESBURG, March 9 (Reuters) - Specialists appointed to try to save struggling South African Airways (SAA) said on Monday they plan to begin employee consultations on job cuts, a stage of the rescue plan likely to meet fierce resistance from trade unions.

“Our intention has always been to preserve as many jobs as possible through this process while still focusing on having a sustainable airline,” the practitioners Les Matuson and Siviwe Dongwana said in a joint statement, adding that they had notified at least seven different unions.

Matuson and Dongwana said that they “contemplate that all 4,708 employees will be affected and the number of jobs that will exist in the restructured organisation will be the subject of the consultation process.”

SAA entered a form of bankruptcy protection in December, with administrators taking over management of the state-owned airline, which hasn’t made a profit since 2011.

Matuson and Dongwana said in their statement on Monday that the airline had “cumulated losses of some 26 billion rand ($1.63 billion) over the past six years.”

A court last month rejected an application by two trade unions to block job cuts at SAA.

The airline is among several South African state entities struggling to stay afloat after nearly a decade of mismanagement - the most serious is leviathan state power utility, Eskom.

The government’s treatment of SAA, and whether it is willing to sacrifice jobs, has been seen as a signal ahead of a much bigger battle with unions over Eskom.

SAA has received more than 20 billion rand in bailouts over the last three years, and has 16.4 billion rand set aside over the next three years to service and repay the airline’s guaranteed debt.

$1 = 15.9049 rand Reporting by Olivia Kumwenda-Mtambo Writing by Tim Cocks; Editing by Susan Fenton

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