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Ex-1time employees object to new airline

Dec 05 2012 07:49 Fin24

1time

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Cape Town - The former founders of 1time are being accused of misconduct, with ex-employees of the low cost airline planning to lodge a formal complaint against them being granted a new operating licence.

Ex-1time employees will be departing to the Department of Transport on Wednesday to object the airlines previous management's application for a new low cost carrier operating licence.

In the wake of 1time's demise, its original founders Messrs Glenn Orsmond, Rodney James and Michael Kaminski revealed plans to launch a new low cost carrier going by the name of Skywise, due to begin operation in 2013 pending the approval of its licence.

In an official complaint to be delivered to the Air Services Licensing Council, the ex-employees claimed awarding the licence the employees are requesting that the parties that founded 1time airline not be granted a license, accused them of alleged misconduct and “failing dismally to successfully run 1time Airline, with a blatant disregard for the public who trusted in their product.

1time directly employs 569 staff who in a letter of complaint claim that the former founders should not be “rewarded with licence to operator another airline, as it will just be an opportunity to ruin another listed company” and “put at risk the employees of the new airline as well as the tens of thousands of people who would invest in their company as it would be listed on the stock exchange.”

The letter further accuses the former owners of “not running the company with prudence or with regard for those who depended on it as a means of livelihood.”

The letter also called into question the business ethic of the former owners who are said to have sold their vested interest in the business, choosing to part ways with the company which had already amassed a colossal debt.

This debt that could have been averted according to an aviation consultant and forensic investigator Christo Ebersöhn, who was appointed by trade union Solidarity in September to assess the viability of the ailing airline.

Ebersohn also charged that the airline wasted millions because of poor management decisions by 1time’s founders and its current owners. 

Fin24's sister publication City Press is in possession of a summary of Ebersöhn and his team’s report and correspondence to the business rescuers working with the company.

Ebersöhn said that both the old and new management – 1time was taken over by a BEE consortium last year that was funded by the Industrial Development Corporation (IDC) – had no clue about running a budget airline.

In his report, Ebersöhn said: “It is appalling to see that management incentives are paid out annually in a struggling company where there is no structured performance measurement or any accountability.”

Ebersöhn and his team found:

  • 1time subsidiary Jetworx employed 422 maintenance staff to maintain the airline’s remaining seven aircraft;
  • 1time poured money into Jetworx to keep it afloat. Staff had little to do and only 70 were, in effect, actually working;
  • The airline needed no more than 35 maintenance staff, and should have lowered its salary bill for Jetworx from R2.5m a month to R600 000;
  • Five aircraft of 1time’s fleet were already grounded and were “cannibalised” to keep the others in the sky;
  • 1time pilots flew only 50 hours a month, compared to SAA and Comair pilots who fly up to 100 hours a month. 1time could have saved R11m on pilots over a six-month period;
  • The airline was plagued with poor credit and risk management, and large amounts of money were wasted, and;
  • “Lack of knowledge and basic incompetence has resulted in major corporate and financial risks being overlooked and not migrated,” said Ebersöhn in his report.

“Things that are important like corporate risk and cash flow management are left at the mercy of less important matters like complaining and blaming uneconomical MD80 aircraft,” the report reads. 

1time employees are calling on the Department of Transport to consider the claims before deciding whether to approve a new low cost carrier operating licence.


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