Retrenchments start in SA’s aviation supply chain as Covid-19 lockdown bites

A subsidiary of Bidvest Group that provides services at SA’s major airports – including operating airport lounges, cargo handling, and passenger chauffeuring – plans to lay off thousands of workers after a large drop in business during the Covid-19 pandemic.

BidAir Services, a subsidiary of JSE-listed Bidvest that employs about 5,000 people across its airport and travel services divisions, has begun steps to retrench more than half of its workforce.

BidAir told its workers in a letter dated 10 June 2020, which Business Maverick has seen, that it would issue them with Section 189 notices under the Labour Relations Act.

Section 189 sets out the steps and consultations a company must follow during retrenchments.

Although BidAir didn’t specify the number of jobs at risk, a source close to the company said there might be 3,000 job losses. BidAir has not yet responded to a request for comment.

BidAir joins a growing list of high-profile aviation companies that are cutting jobs during the Covid-19 pandemic, including state-owned SAA and SA Express, and Comair, the operator of low-cost carrier kulula.com, and British Airways under licence in southern Africa.

Arguably, SA’s aviation industry will emerge as the biggest casualty of Covid-19 because the industry hasn’t enjoyed relief measures from the government – unlike governments in the US and EU that have launched fiscal bazookas to support struggling airlines through bailouts.

The closure of airports and borders by the government since 27 March to stop the spread of Covid-19 has not only had an impact on airline companies, which have been forced to ground their planes, but also the entire aviation supply chain.

BidAir, whose profitability depends on a functioning aviation industry, is facing financial problems due to the closure of airports and travel bans that have been imposed by the government.

“It is unfortunate that our organisation, which is dependent solely on the aviation industry, has been particularly badly affected by the [Covid-19] situation. The Covid-19 situation also hit us on the back of a flailing economy,” BidAir said in its letter to workers.

“The permanent closure or downsizing of large parts of BidAir appears unavoidable and you will, in due course, be served with section 189 notices, in line with the prescripts of the Labour Relations Act, 66 of 1995 as amended.”

BidAir said even when airports reopen – as they have during a Level 3 lockdown – the company’s “services will remain constrained”. During the Level 3 lockdown, few airports have reopened their doors, and airline companies are allowed to operate business flights, but only between Cape Town, Johannesburg, and Durban.

This means airports and airlines are facilitating the travel of fewer passengers and operating limited flight schedules, which affects BidAir’s profitability because its lounges at major airports are still closed and its airport handling services (cargo, passengers, and ramp) are not operating at full capacity.

And with demand for air travel expected to remain low post the Covid-19 period, BidAir’s operations will likely struggle for a while. DM/BM