Mad scramble to secure broke SAA December salaries

Crippled state airline South African Airways cash crunch could steal the festive cheer for employees there as they were informed their December salaries could be paid after Christmas or not at all.

Several anonymous sources at Airways Park said Chief Executive Vuyani Jarana informed General Managers and heads of departments this week that salaries, which are normally paid on December 21 and 22, would only be paid on the 27th for junior staff members, while senior management would be informed later when to expect their monies.

One said they were told by managers “there’s no money for salaries” and that they were trying to source funds.

SAA spokesperson Tlali Tlali did not respond directly to questions, but said the airline’s management met with unions to “apprise them of progress the company has made to secure funding for the airline’s working capital requirements.”

“The work to secure funding has been undertaken collectively by management, the board of directors and the shareholder. We have secured favourable outcomes following our engagements with the lenders where the banks have in principle agreed to provide funding to SAA until the end of March 2019,” he added.

READ MORE: High-level turbulence rocks SAA

“We are in the process of finalising the necessary administrative processes with the lenders to conclude the funding agreements and anticipate these to be finalised in the next day or two. For this reason, we have communicated with all employees that they will receive their salaries on 24 December 2018.”

This latest issue comes on the back of a Mail & Guardian report that Jarana was considering calling it quits after a fallout with the board. Last week Business Day reported that SAA’s shareholder, Public Enterprises Minister Pravin Gordhan stepped in to persuade the former Vodacom executive against resigning.

Among Jarana’s biggest frustrations would be the airline’s perilous financial situation, which is so dire that Jarana told parliament last month that he required R 3.5-billion, some of which would be working capital, by December. If he secures this, he will require another R17-billion, R9-billion of which will be for servicing the debt that matures next March.

READ MORE: Broke SAA goes on spending spree

SAA has received R15-billion in government bailouts in the last year, the latest of which was a R5-billion appropriation by Finance Minister Tito Mboweni in October.

The airline made headlines earlier this year when the M&G reported that it was splurging millions on new executives and consultants. At the time Jarana said it was hard to convince capable executives to join the airline because of its bad reputation.

In July the company confirmed to the Democratic Alliance it had paid former interim CFO Robert Head R5.5-million to work there for six months. 

READ MORE: Costly Head winds pummel SAA

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Sabelo Skiti

Sabelo Skiti is an investigative journalist.

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