TROUBLED South African-based and London Stock Exchange-listed African budget airline, Fastjet, has offered its workers a “hardship allowance” to cushion them from the effects of the deteriorating economic situation, although some workers are unhappy with the relief package which they claim is “demeaning”.
By Kudzai Kuwaza
The economic crisis has deepened since the pronouncement by Reserve Bank governor John Mangudya in his monetary policy statement on October 1 that foreign currency and Real-Time Gross Settlement (RTGS) accounts be separated.
The pronouncement triggered the skyrocketing of prices and shortages of basic goods. It has also resulted in a number of retail outlets and pharmacies pricing their products in foreign currency which is inaccessible to the majority of Zimbabweans who are using bond notes and RTGS.
In a letter to Fastjet employees, accountable manager Ed Berry told the workers that the company was offering a hardship allowance to supplement salaries eroded by inflationary pressures.
“We are aware of the evolving economic situation and pressures in Zimbabwe and have been evaluating the impact that this is having on all our staff. We thank staff for their feedback on this matter received over the past few weeks,” Berry wrote.
“We understand that inflation is kicking upwards and that your buying power has been reduced, particularly with certain essential service businesses now starting to charge for certain products and services in hard currency, US dollars, or FCA (foreign currency account) transfers.”
He pointed out that the company has put in place an “ad-hoc hardship allowance/salary structure which includes an allowance which is equivalent to 15% of current gross salary, shall be paid and added to the monthly payroll for all staff, effective December 2018. The company is also offering to supply them with a “food hamper”, valued at approximately $65 for workers earning a gross monthly salary of less than $1 500.
Berry added that for flight and cabin crew, instead of accepting the above-mentioned “ad-hoc hardship allowance”, they may choose to waive this, and instead receive 15% of their current gross salary in the greenback, which must be paid into a new FCA in Zimbabwe.
The offer has, however, irked some workers who would prefer to be paid in US dollars instead of receiving food hampers and have accused the company of favouritism. They feel they are being trivialised with some getting US dollars, while they just get food hampers.
The airline, set up by easyJet founder Sir Stelios Haji-Ioannou, flies in several African countries, including South Africa, Tanzania, Mozambique, Zambia and Zimbabwe.
Some of the airline’s problems are caused by Zimbabwe’s economic environment. Fastjet has US$3,3 million in cash, of which US$1,75 million is held in Zimbabwe and is not readily accessible due to the liquidity crunch and cash crisis.