Vuyani Jarana. Picture: STEPHANIE LLOYD/DAILY DISPATCH
Vuyani Jarana. Picture: STEPHANIE LLOYD/DAILY DISPATCH

South African Airways CEO Vuyani Jarana has angered the South African Transport and Allied Workers’ Union (Satawu) by giving an undertaking to trade union Solidarity that the state-owned national carrier would immediately start looking for a strategic equity partner in the private sector.

Solidarity provided detail on Wednesday of a written undertaking by Jarana that the search for a strategic partner for the deeply indebted airline would begin immediately.

The airline could not yet provide the scope, nature or control structure of the partial privatisation it might be contemplating, said spokesman Tlali Tlali.

Satawu spokeswoman Zanele Sabela said the five unions that represented workers at SAA had not been informed of the decision to start looking for an equity partner immediately.

"We were surprised to hear about this latest development in the media despite having regular engagements with Mr Jarana," said Sabela.

"Even more surprising is the fact that Solidarity is not a recognised union within SAA. This leaves us wondering why he would opt to make them privy to such crucial information."

Satawu represents the majority of unionised workers at SAA Technical and Airchefs. None of the unions has a majority across the group and coalitions shift in line with interests.

Unions to  meet Jarana

The unions are meeting Jarana on Thursday to discuss statements he made in recent weeks about staff matters without having spoken to the unions about it first.

Jarana "knows the process of retrenching staff is a legal one", said Sabela. "What we know is he has a turnaround strategy that he has started implementing. It does not look good to alter it each time to suit his audience."

Jarana told Business Day that what he had told Solidarity was "nothing new" in that it had been accepted in the government and by the Treasury that the airline would seek private sector participation in ownership of SAA.

He did concede, however, that the previous approach to first put SAA in order before offering it to investors could no longer be done because of financial pressure.

The approach now was immediately to begin looking for a private sector partner.

Finding a partner would not be just about the money, said Jarana. SAA was also looking for competencies and skills and access to products.

"What we want is a tailwind into the market."

Solidarity said it had suspended — but not abandoned — its application to have SAA placed into business rescue based on Jarana’s undertaking. Business rescue would trigger the immediate recall of SAA’s debt, including money owed to all suppliers.

SAA has recorded a loss for about a decade and has run up a massive debt. Jarana said in May the airline needed recapitalisation of R21.7bn over the next three years to turn it around.

In the 2017-18 year, it made a loss of R5.6bn.

A debt repayment of R9.2bn is due by March 2019, which, he said, the airline was "working day and night" to achieve.

Solidarity also questioned the rationality of SA maintaining a national flag carrier, but Jarana dismissed such objections, saying having a national airline was not inconsistent with making a profit. "We are looking beyond sentiment. SAA is an African airline and we are looking to connect Africans to Africans."

blomn@businesslive.co.za

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