'No sacred cows': South African Airways boss plans deep cuts

Six months into the job of running loss-making South African Airways, Vuyani Jarana is mapping out a punishing austerity plan. Jarana, who faces the daunting task of turning the flag carrier around, said layoffs and other cuts were unavoidable as he contends 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 the state-owned carrier 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. SAA’s woes are emblematic of the struggles of traditional flag carriers around the world. These airlines are contending with low-cost rivals and a spike in oil prices, which puts pressure on those with the highest labor and other non-fuel costs. The problems are also an illustration of the malaise afflicting the airline industry in Africa, whose airlines have the weakest finances and emptiest planes of any region of the world. Jarana told Reuters he was also setting up other moves to reduce the airline’s 33.5b rand operating costs. They include squeezing suppliers for better deals and cutting back on its number of flights to London from twice to once a day.<br/>