Heads to roll as SAA cuts costs

JOHANNESBURG – SAA has begun a series of cost-cutting measures, including reducing the number of managers by between 20 per cent and 30 per cent.

Addressing a management meeting attended by more than 500 managers yesterday, president and CEO Andre Viljoen said the airline was “cleaning up its management structure” and introducing cost-cutting measures. The airline industry had generally been experiencing major challenges.

These were exacerbated by the September 11 attack on American business and political symbols. “After September 11 airline values across the world have been decimated by up to 60 per cent.

“There is a possibility of many of them going insolvent. There have been world-wide layoffs totalling up to 200000,” said Mr Viljoen.

“There are significant weaknesses within SAA such as the burgeoning management structure, inconsistent passenger service, lack of passion and ownership by some SAA employees and increasing costs,” added Mr Viljoen.

“Between May 1999 and October 2001, the SAA management structure jumped from 480 to 668 – a 39 per cent increase.

“For us to survive, we have to streamline the management structure, eliminate duplication and non-value adding functions, including the reinforcement of accountability and responsibility.

“To achieve that, we have to reduce our management numbers by between 20 to 30 per cent. In all of these the Labour Relations Act will be followed to the letter,” said Mr Viljoen. Other cost-cutting measures would include:

Replacing all company cars with an allowance scheme.

Company cellphones only to be used if the job requires it.

Secretaries to be shared among managers.

Duty travel to be undertaken only when necessary.

Foreign travel allowances to be reduced from $90 (R855) to $70 (R665) a day.

All new employment has been frozen.

Restrictions on all off-site retreats for team-building.

Performance bonuses to be paid only if SAA meets headline profit of R50-million.

However, Mr Viljoen said it was not all doom and gloom, adding that this was not a retrenchment programme, but a “management clean-up”. – Sapa