Airline briefs committee on its challenges
This week, the Portfolio Committee on Public Enterprises conducted an oversight visit to South African Express (SAX), a state-owned company.
The visit to the airline was for members of the Committee to understand the challenges that SAX is facing, in particular relating to governance and financial difficulties that the company is experiencing. During the oversight visit, the Committee conducted a walkabout to engage with the workers on the ground so as to understand the operations of the company and some of difficulties that employees are faced with.
During the visit, the Committee interacted with organised labour and customers. The interaction with organised labour was to understand the challenges that workers are faced with and to gather information on what needed to be improved. During the meeting, a representative from SATAWU expressed concern about the future of workers at SAX, especially cabin crew members. SATAWU enquired about the kind of intervention that the Department of Public Enterprises would undertake so that people are not retrenched.
In its presentation, SATAWU the union was concerned because of the reports received regarding the financial situation of the company. In addition, representatives from SATAWU reported that over the past few months the company had had intensified disciplinary hearings against cabin crew members, some of whom have since been dismissed.
The Aviation Union of South Africa said one of the biggest frustrations among technical people and engineers was that they could not perform the duties that they were getting paid to do. This was mainly due to aircraft spares not being sourced in time for technicians to perform their daily tasks. This has had a knock on effect on the company wherein SAX is losing certified technicians to overseas countries.
Briefing the Committee, the Pilot Association said a number of things were wrong within the company. These included the competition in the three state-owned companies (Mango, South African Airways and SAX). The high charges that SAA and Airports Company South Africa is charging on SAX are exorbitant because costs charged on SAX are equal to the bigger airlines with higher profits. Organised labour expressed concern about the lack of leadership in management. Furthermore, the association said the company had a high head count which is a cause for concern. The association reiterated the spares shortage which was a result of cash shortage.
The Committee also received a briefing from the board and senior management. The Committee expressed concern about the financial position of SAX. SAX informed members of the Committee that the business was insolvent - unable to pay its debts. The management, however, informed members of the Committee agreements had been reached with service providers to address the challenge. Members were informed that the company had not held an annual general meeting.
Mr Inati Ntshanga, Chief Executive of SAX, said the entity needed to raise funds with the bank but the bank needed a shareholder agreement in order to secure the loan. Mr Ntshanga said an application had been sent to National Treasury and Department of Public Enterprises. They are currently waiting for a response. The Committee welcomed the presentation and austerity measures put in place to address the financial challenges that the company faces.
However, the Committee noted with concern the financial situation of the company. The Committee appreciated the openness and honesty that it received during a presentation from management. Members alluded that issues that management presented are similar to the ones that emanated during the walkabout with staff members and the meeting with organised labour.
The Committee welcomed the measures in place to curb wasteful expenditure, a concern which was raised by organised labour during the meeting. The Committee resolved a further engagement with the board and management to address and find solutions to the issues brought up by organised labour.
The Committee congratulated SAX on the cadet training programme, which aims to empower and train young people from previously disadvantaged background as commercial pilots. The Committee received a briefing from two students who are part of the programme. The Committee said this was great initiative which needed to be communicated to people so that they can benefit from such opportunities.
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Ms Yoliswa Landu
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