While the state-owned SAA deepens in debts worth billions of rand, report shows that SAA pilots share the largest chunk of money invested in the airline business.
According to the latest documentary report from the airline, pilots working for the national carrier cost the ailing SAA a whopping R697m per annum.
In the confidential documents called evergreen benefits enjoyed by pilots as seen by the citizen, SAA spent R52.9 million on pilots and crew accommodation and rest facilities in the month of January alone.
This totals R634 million annually and if traveling benefits of R63 million per annum is added, the amount grows to R697 million.
The South African Airline has been through financial distress finding itself in over R6 billion debt over the 2014/2015 business year.
A number of concerned citizens blame it on corruption and mass misappropriation of funds by “the board’s incompetent” chair Dudu Myeni.
In another document, the SAA pilots are entitled to free family travel on a preferential basis to normal fee-paying passengers – in business class. This has apparently led to losses due to the bumping off of paying business class passengers to accommodate families of pilots.
However, the citizen reported that the so-called evergreen benefits enjoyed by SAA pilots revealed that “a recent peak holiday flight carried 19 pilot family members in business class.
If all SAA pilots flew a family of four once a year to Washington, the total annual cost to the airline would be R250 million. Other airlines do not offer an equivalent benefit.
“Allocation of business class seats to family members can offend fee-paying customers with children unaccustomed to that class of travel being accommodated together. SAA is obliged to pay the full value of these free tickets. It is not uncommon for fee-paying passengers to be bumped off a flight – resulting in a revenue loss.”
The sources within and outside SAA also revealed pilots are accommodated in hotels of the highest global standards while the remainder of the flight crew stay in two-star hotels.
“This is not an international aviation practice where crews normally stay together. This adds R60 million to the annual cost base and has created labour pressure to permit all crew the same benefits, adding close to a further R100 million. A total incremental cost to the airline of R160 million a year,” reads one document.
Speaking on the benefits entitled to pilots, an insider reportedly said if a pilot gets divorced, the previous wife gets the benefits and the new girlfriend gets the benefit at the same time. “It is part of the agreement.”
From this report, it’s evident that the SAA pilots are costing the airline an estimated R2 billion in “excessive” benefits, guaranteed in terms of the long-term agreement between the SAA and the SAA Pilots Association.
Nevertheless, the deputy finance Minister Mcebisi Jonas said there’s an urgent need to get the airline out of its financial debt before any private equity partner for the national carrier can be considered.
Briefing the parliament’s Standing Committee on Finance, the deputy minister said the government is still committed to the idea of a private equity partner for SAA to ease the burden on state coffers, but not now.
“The stance that we’ve taken is that we must first ensure that we improve the financial position of the airline, stabilize it, and ensure that we have a strong and solid strategy for the airline and look at all possibilities to bring it back to solvency,” he said.