A strike by South African Airways’ (SAA) 800 pilots is looming, in a further blow to the airline’s widely criticised ”emperor”, CEO Khaya Ngqula.
The SAA Pilots’ Association (SAAPA) started its strike ballot on Wednesday this week, over what it alleges is a unilateral attempt by SAA management to change the terms of its contracts. As pilots are scattered around the globe, the ballot is expected to take two weeks.
SAAPA chairperson Piet Taljaard laid the blame for the dispute — currently before the Commission for Conciliation, Mediation and Arbitration — squarely on Ngqula’s shoulders. Taljaard said that never in the history of the airline had relations between management and the pilots been so poor. Tensions rose sharply after Ngqula’s arrival at SAA.
There are widespread perceptions in SAA — and some sections of the government — that the CEO’s imperious management style was central to the crippling strike by ground staff and cabin crew. The immediate cost to SAA of the six-day strike is estimated at R950-million, leaving out of account the likely loss of future custom.
Despite this, support for Ngqula from his political principals, chiefly Public Enterprises Minister Alec Erwin, remains firm.
One insider at the airline told the Mail & Guardian: ”If Khaya Ngqula was not the CEO, this strike would have been over a lot quicker.”
This echoed the views of others in the government and the major parastatals, frustrated by the former Industrial Development Corporation chief’s perceived arrogance.
”This could have been sorted out last week, but he listens to no one,” said one person familiar with behind-the-scenes moves to contain the damage caused by this week’s industrial action.
The six-day strike was settled on Thursday with the United Association of South Africa and the South African Transport and Allied Workers’ Union (Satawu), which accepted SAA’s offer of a 5% across-the-board increase, plus a 1% increase in non-pensionable salary, backdated to April 1.
”We don’t like the result, but it is a result we can live with,” said Satawu secretary general Randall Howard.
Worries about possible job cuts, anger over cost-containment measures and uncertainty sparked by the resignation or suspension of almost the entire executive team in the months following Ngqula’s arrival at SAA had already hurt staff relations.
When media reports began detailing the CEO’s lavish expense budget, which included the frequent use of a helicopter to attend meetings within Gauteng, attitudes hardened.
The suspension of human resources executive Nolazawi Qata did not help matters. Her replacement is widely seen as the CEO’s lieutenant.
”That is classic Ngqula. He insists on having control of the HR department,” said a former colleague.
”At the Industrial Development Corporation [vice-president for professional services] Les Matlhape, was Khaya’s guy. He earned R2,8-million last year, which must make him the best-paid HR manager in the country.”
Ngqula’s apparent absence from the front line of the dispute — his decision to travel to Mpumalanga for the weekend as the strike began drew a rebuke from SAA chairperson Jakes Gerwel — did little to dispel the impression of remoteness.
After the strike ended on Thursday, he told the South African Press Association: ”Starting today, we are back in business.”
However, Ngqula refused to discuss the cost of the strike, estimated by economist Mike Schussler to have been about R25-million a day.
”The cost to the airline — we are not going to tell you. It is simple. Because of competition,” Ngqula said.
One rumour among staff is that Ngqula believed he could hang tough because SAA is well insured against industrial action. The airline did not respond to questions about the costs of the strike or insurance cover.
The support of his political principals appears to have been central to Ngqula’s confident stance.
Unlike his predecessor, Jeff Radebe, who made a widely publicised intervention in the long strike at airport services company Equity Aviation in 2003, Erwin has confined himself to quiet diplomacy and solid support for Ngqula.
Minister of Labour Membathisi Mdladlana intervened more visibly in the negotiations, a move close observers believe will have created tension between the Cabinet colleagues.
In the face of widespread criticism of the handling of the strike, Erwin has remained adamant that Ngqula is doing a good job.
”It is hard to understand how we should hold management accountable. It was the unions who decided to go on strike and it is their right to do so,” Erwin said. ”An 8% increase was not sustainable, and management would have been thoroughly irresponsible to SAA and the economy if they had acceded to such a demand.”
The improvement in SAA’s financial position, he insisted, should be credited to both management and employees: ”What I would not have condoned would have been an 8% increase, as this would have jeopardised the tentative and sensitive turn-around of SAA from a financial problem to a financial success and a key asset in our economy.”
Such clear political backing has made it difficult for other players in the saga — including Transnet executives — to exert leverage on Ngqula, or even offer advice.
SAA will be moved off the Transnet balance sheet by March next year if planned restructuring remains on track, but the losses inflicted by the strike this year will filter through to Transnet’s still-fragile bottom line.
Any longer-term weakness in profits introduced by higher-than-expected staff costs would have the same effect. SAA effectively owes Transnet R1,6-billion, a debt incurred in the winding-up of its disastrous foreign currency hedges, and that cash is urgently needed to finance debt restructuring and a R40-billion investment programme.
SAA spokesperson JJ Tabane confirmed that SAA’s agreement with pilots would have to be renegotiated, but declined to provide further details.
He added that it was nonsense to suggest that Ngqula had abandoned his post after the strike started. He had been attending a conference organised by FNB, SAA’s largest corporate client, and had ”a highly skilled team of executives … clearly mandated to manage the airline’s affairs — this is not a one-man operation”.
Poor spin control costs SAA
Public relations experts believe that poor crisis communication by South African Airways has inflicted lasting damage on its brand, writes Lloyd Gedye.
Executive director of Gillian Gamsy International Communications Daryn-Lee Gamsy said the way that SAA had handled the strike was ”very disappointing” and an example of ”how not to do it”.
”It is important to be out there communicating with customers so that they know what’s going on and you can provide them with alter-natives. There should not be queues of customers at airports.”
3D Global Strategic Communications MD Melissa Powell said the most successful strike in SAA history had done immense corporate damage and would have a severe impact on the brand and customer loyalty.
”People are pissed off and they are using other airlines,” she said.
According to Gamsy, SAA did not supply the public and media with constant updates to keep them informed on what progress was being made.
”Communications must have a key role in crisis management; communicators must be in meetings between management and unions,” said Gamsy.
”They need to be at the heart of the dispute, because they are the most visible element of a strike.”
Gamsy said senior executives were crucial to implementing an effective crisis communication strategy. While the strike was causing havoc last Friday, SAA chief executive Khaya Ngqula was reported to be staying in a luxury hotel near the Kruger National Park with his wife, drawing criticism from SAA chairperson Jakes Gerwel.
”It has got so much to do with the leadership and senior executives going out with broad shoulders and taking the brunt of it. They need to provide immediate communication on developments,” said Gamsy.
Powell and Gamsy said planning for different scenarios was the key element to effective crisis communication, and that this was often neglected.
SAA spokesperson JJ Tabane said: ”We believe the contingency plans were adequate, given the size of our operations and the amount of passenger and freight traffic that we carry as the national airline.”
Tabane said SAA’s crisis communication strategy was an integral part of the contingency plan and that they were happy with its basic roll out.
”Obviously, one tends to hear more from those passengers who were affected negatively by the strike … which has obviously shaped media perceptions.”