S.African Airways strike costs: R25 million per day

The current strike is costing South African Airways (SAA) R25-million a day, an economist said on Tuesday.

T-Sec chief economist Mike Schussler said that is not the total cost of the strike -- which is lower -- as there are mitigating factors.

"One's pain is another's gain," Schussler said, adding that about half of SAA's passengers are finding alternative flights and means of reaching their destinations.

There is, however, a hassle factor for tourists and business travellers.

What the economic effect of the strike is on the hospitality industry is also difficult to establish.

Airline strikes are quite common in Europe and tend to postpone travel rather than cancel it. The same is likely the case here, with tourists being willing to delay departure a day or two.

It is only after this that they might be tempted to change destinations.

SAA spokesperson Onkgopotse JJ Tabane said it is too soon for the airlines' auditors to calculate losses.

"A flight cancellation does not automatically mean a loss," he said.

The full effect will only be known at a later date. The strike has seen at least 90 bookings cancelled at tourism establishments in the Nelson Mandela Bay area in the Eastern Cape, a spokesperson there said.

One game reserve reported a cancellation of three bookings that would have translated into 13 bed nights worth about R30 000, said Fezekile Tshiwula, CEO of Nelson Mandela Bay Tourism. He reported a drop in telephonic enquiries and bookings at the call centre.

One of the organisation's members reported that he resorted to hiring a bus for American guests, resulting in extra cost and inconvenience.

"It's in our best interests for the matter to be resolved as soon as possible," said Tshiwula.

South African National Parks spokesperson Raymond Travers said the strike did not have an immediate effect on the park's bookings, as most visitors at this time of year are South Africans who drive themselves to the park.

But as the school holidays taper off, more facilities become available for overseas visitors and the effects will be known then, Travers said.

Fancourt's marketing director, Kwakye Donkor, said business is running as usual with three other airlines still flying down to George.

Schussler said the Pick 'n Pay strike is very different.

There, unlike at SAA, where cabin staff have to be certified competent, temporary staff can be brought in and the stores can remain open.

Pick 'n Pay is also not dominant in its market, as is the case with SAA. As a result, the loss to the economy is quite small.

Schussler said the same applies to a municipal workers' strike set to start on Wednesday, as well as an ongoing strike at Highveld Steel.

Econometrix chief economist Azar Jammine recently said he has noticed a tendency of frustration among workers "at the huge gap that exists between the rate of increase in wages they are being denied and the rate of increase in executive remuneration, which is being achieved either in the form of direct increases or in the form of bonuses or other incentives that workers feel are repulsively obscene".

Schussler agrees with the view, saying there is an increasing need for greater alignment between executive pay and what workers are paid, especially at public companies. Private companies are another matter, he cautioned.

"If workers get 6%, the chief executive should not get too much more," he said.

"We need social accord on this issue, not just in South Africa. CEs may think they are very important, and they are, but overall they are also working for the shareholder in a public company." -- Sapa

Source: Daily Mail & Guardian

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