The schedule is to return to normal over the weekend

Johannesburg (AFP) - South Africa’s flag carrier said Friday it had signed a deal with workers to end a costly week-long strike that forced hundreds of flight cancellations.

“South African Airways (SAA) has reached an agreement with unions to end the industrial action, which began seven days ago,” the airline said in a statement.

Thousands of SAA staff including cabin crew, check-in and ticket personnel, technical and ground staff walked out last Friday after the cash-strapped airline failed to meet a litany of demands, including for higher wages and job in-sourcing.

It said unions had agreed to call off the strike with immediate effect and to instruct their members to return to work by Saturday.

The airline said it would progressively restore its full flight schedule over the weekend.

“In practical terms, this means that SAA will operate a near normal service on Saturday,” it said.

As part of the deal, management and unions agreed to a 5.9 percent wage increase backdated to April, but which would only start to be paid out next March “subject to availability of funding”.

Unions had demanded an eight percent increase.

Debt-ridden SAA, which has failed to make a profit since 2011 and survives on government bailouts, had initially refused any salary raise.

The airline needs two billion rand ($136 million) to fund operations through the end of March.

“This deal, particularly the fact that we offered a 5.9 percent salary increase amidst grave financial challenges, is to recognise the company’s employees for the important contributions they make to the overall success of the company, economic development, and inbound and outbound tourism,” said SAA chief executive Zuks Ramasia.

- ‘We have the money’ -

National Union of Metal Workers of South Africa (NUMSA) spokeswoman Phakamile Hlubi-Majola addressed striking workers outside the SAA head office telling them that the government “has committed to pay the airline for operational purposes”.

“As of this morning, there wasn’t even money for salaries for November, but because of you, we have the money,” she told a crowd of jubilant workers.

Local media had earlier this week cited Public Enterprises Minister Pravin Gordhan warning that the strike was only exacerbating the airline’s financial woes.

“SAA doesn’t have enough cash to possibly even pay salaries at the end of the month,” he was quoted by fin24 as telling lawmakers.

The unions had also demanded a three-year guarantee of job security following an announcement earlier this month by the airline that almost 1,000 employees could lose their jobs as part of a restructuring process.

SAA said the process to apply to lay off workers “will be deferred effective from the date of signature of this agreement” to end of January.

The airline, which employs more than 5,000 workers, is Africa’s second largest airline after Ethiopian Airlines.

With a fleet of more than 50 aircraft, it flies to more than more 35 domestic and international destinations.

Owing to the strike, SAA had been losing 52 million rand a day as it scrambled to partially restore international and regional flights earlier this week.

South Africa is struggling to get state-owned companies back on track after nine years of corruption and mismanagement under former president Jacob Zuma.