‘We won’t interfere in operations’ - new SAA chair
14 Nov 2017 - by Darise Foster
The roles of various stakeholders at SAA have been clearly laid out and the airline’s new board has vowed to stay away from the day-to-day operations of the airline.
Former SAA chairperson Dudu Myeni was has been accused of getting involved in decision making at the airline in the past, but new chairperson JB Magwaza says his board will leave the running of the embattled national carrier to its executive committee.
Speaking at a recent media briefing, JB said the lack of designation of roles, functions and relationships between the airline, the board and the National Treasury as the airline’s shareholder was one of the major factors that caused problems for SAA in the past.
“The board will be quite involved for the next month or two as the plan for the implementation of the turnaround strategy is laid out, but otherwise, the job of running the company belongs to the ceo and his executives - and we as the board will not interfere,” Magwaza said.
Finance Minister Malusi Gigaba agreed. “The roles of the shareholder, the board and the airline exco must be clearly understood and respected so no one steps on anyone’s toes,” Gigaba said.
“That means it is up to the ceo is ensure there is adequate information sent to the board and the shareholder regarding the process of stabalising the airline by guaranteeing we get the reports we need, etc.,” he said.
Vuyani Jarana, newly appointed ceo of SAA, is the leader airline, Gigaba said. “He runs the airline and has been given the power to do so,” said Gigaba. “Therefore it is up to him to establish clear measures that will improve the running of the airline and reignite confidence among the public and the airline’s stakeholders.”
“[Jarana], as the ceo, is the main spokesperson of the airline – not the Minister of Finance and not the chairman of the board, therefore it is up to him to ensure that everyone is confident that the airline is being run properly,” Gigaba said.
“This is the last time you will hear me speak for this long about SAA. It is the duty of the ceo,” Gigaba said.
<crosshead> No clarity on SAA funding
There is still no clear understanding as to how SAA will continue to operate as a going concern.
Speaking at the briefing, Minister Gigaba said the issue of funding SAA will be addressed in the next few months. “[For now], the remaining R4.8bn of the R10bn allocated to SAA will be paid in instalments of R1bn at the end of every month up to March 31, 2018,” Gigaba said.
Because of the recapitilisation received from the shareholder, SAA is able to pay salaries and debts, said new SAA cfo Phumeza Ngantsi. The airline will also continue to regain the R1bn it is unable to repatriate from Angola due to the country’s shortage of foreign currency, she said.
She clarified that Angola does not owe SAA money, as previously reported. “The money is in our bank account but we are unable to repatriate due to the shortage of foreign currency,” she explained.
“We are also continuing with discussions to bring a strategic equity partner on board to provide private sector capital as well as expertise for the airline to move forward and bring it back to sustainability,” Gigaba said, adding that SAA needs a new fleet, and this will not be paid for by the fiscus.
Many people have shown an interest in partnering in the SAA Group - even long before the announcement regarding the strategic equity partner was made, Gigaba revealed. “They range from airlines to financial institutions to other investors, but no one has been spoken to yet as we are not interested yet. Once we have started the process of looking for a partner, we will make a formal announcement,” Gigaba said.
There is no indication at this point as to when the equity partner will be brought in as there is no timeline that the airline is working with, Gigaba added.
Nonetheless JB said the Minister has given the board clear instructions which will help move the airline forward. “I think we are at the brink with SAA, and with every decision we either move forward from here or we will fall at the way-side,” he said.
The next step is for the new board to be inducted and brought up to speed on the Public Finance Management Act (PFMA) and other legislation under which they will operate, Gigaba concluded.