As part of moves to bring the country’s largest airline back to its feet, Finance Minister Pravin Gordhan has announced that the South African Airways (SAA) will soon have a new CEO.
The minister and head of the SA treasury said this on Friday while admitting that he is about finalizing processes of appointing a new CEO for SAA by the end of March.
According to the minister’s letter sent to the Speaker of the National Assembly Baleka Mbete requesting permission for a delay in tabling the corporate plan for the three years 2017-18 to 2019-20, a new CEO is needed as soon as possible so the person would participate in the corporate planning process.
“With the assistance of the restructuring adviser and restructuring officer, the SAA is currently undertaking a review of its long-term strategy and corporate plan which is expected to be completed by the end of June 2017,” Gordhan said.
The SAA has been operating under an acting CEO Musa Zwane who was appointed the airline’s seventh CEO in 2015.
The lack of a permanent CEO has been argued to be part of the challenges pushing the airline into deep crisis of recent. It is also argued to be one of the causes of the airline’s instability as its board chair has frequently been in clash with the treasury.
The troubled national airline SAA has suffered losses of over R4.7 billion in the past financial years and has been confirmed to be in deep financial crisis after it posted the losses in the 2014/15 financial year.
The airline during its preliminary results, blamed the country’s weak currency, impairments, finance costs and other factors for its total loss of R4.7bn.
Last year, the treasury approved a R5-billion guarantee for SAA after Gordhan talked with the airline’s new board on ways to make the state-owned airline functional again. Yet, the airline’s operation is staggering.
Recently, SAA pilots and the Organisation for Undoing Tax Abuse (Outa) who have been pushing for the immediate firing of Dudu Myeni, said their legal bid to have her fired could lead to her being permanently barred from holding senior positions in companies in SA.
Saapa and Outa were acting on what they saw as a culture of gross lack of direct accountability within state-owned entities. Their court papers lodged this month cited five contracts and deals under Myeni’s tenure that breached the Company’s Act. This according to them, resulted in the fall of the airline’s financial status.
“Our national carrier is quickly reaching the tipping point where its very survival is in question,” said SAA Pilots Association (Saapa) chairperson Jimmy Conroy.
Meanwhile, the Finance Minister has asked Mbete for permission to table the SAA corporate plan for 2017-18 by the end-March, instead of tabling the three-year plan required by the Public Management Finance Act, he sought permission to submit the three-year plan by end-July.
DA deputy finance spokesman Alf Lees however, noted that the appointment of the CEO is yet to be finalized and the minister’s request for approval of a deviation in the tabling of SAA’s corporate plan are indicative of the turmoil and legacy complications created by the previous board with Dudu Myeni at the helm.