Six months into the job of running loss-making South African Airways‚ CEO Vuyani Jarana is mapping out a punishing austerity plan.
Jarana‚ who faces the daunting task of turning around the national carrier‚ said layoffs and other cuts were unavoidable as he contended with a draining cost-to-income ratio of 108%.
“SAA cannot carry the same workforce‚ whether it is pilots‚ cabin crew or administration‚” he said. “We have to make some tough decisions to save the airline. There cannot be sacred cows when it comes to SAA.”
He declined to put a number to the job losses‚ but two sources familiar with his plan said SAA was likely to cut between 1‚000 and 1‚500 people via a combination of layoffs and voluntary redundancies to bring its employee-per-aircraft ratio in line with regional competitors.
The numbers include about 300 flight attendants‚ according to one of the sources.
Some of the carrier’s 700 pilots‚ encouraged to look for jobs elsewhere‚ have drafted their own severance pay offer to SAA‚ the second source said.
On Monday‚ SAA catering subsidiary Air Chefs announced it planned to retrench 118 workers in what could be the start of a more profound restructure of the airline’s entire workforce.
TimesLIVE reported earlier this month that Jarana had accepted a challenge from Free Market Foundation executive director Leon Louw to pay R100‚000 to charity if his three-year turnaround plan for the airline did not succeed.
Louw said he was willing to wager Jarana R100‚000 that his three-year turnaround plan would not work and that by 31 March 2021 — Jarana’s stated timeframe — SAA would not be in profit.
“As a sign of his personal commitment to the cause‚ the airline’s CEO‚ Mr Vuyani Jarana‚ commits to match the pledge for R100‚000 from his personal resources‚” SAA said in response.