SAA CEO out

[wesheltonj]

https://onemileatatime.com/south-af...y0P2Kq_AxIs2l7g1Uw2TZwA4sc_muhafFu2iHBRHS7wVo


Unfortunately this doesn’t come as much of a surprise, but South African Airways’ CEO, Vuyani Jarana, has just announced that he’s resigning as of August 31, 2019.

The current CEO has been at the airline since November 2017. Prior to that SAA had seven CEOs in five years, which should give you a good sense of just what a mess the airline is.

Why South African Airways’ CEO is resigning

South African Airways’ CEO is resigning because he says that uncertainty about funding and slow decision making processes have delayed his turnaround plan for the airline, and he can no longer sit by and let this happen:

“The strategy is being systemically undermined, and as the Group Chief Executive Officer, I can no longer be able to assure the board and the public that the LTTS (long term turnaround strategy) is achievable.

Whereas government injected R5bn of funding in the 2018/2019 financial year, a big chunk of that was used to fund creditors up to the end of March 2018.

We have not been able to obtain any further commitment from government making it very difficult to focus on the execution of the strategy.

I spend most of my time dealing with liquidity and solvency issues. Lack of commitment to fund SAA, is systematically undermining the implementation of the strategy making it increasingly difficult to succeed.”
Jarana seems well intentioned and like he genuinely means well for the airline. In June 2018, he even bet R100,000 of his own money that he could make the airline profitable within three years.

Why South African Airways is a mess

South African Airways has an inefficient fleet with no renewal plans, an inefficient route network, a huge amount of debt, and a lack of commitment from the government, which is preventing them from moving forward.

Not only can the airline not get the necessary funding to make improvements, but they can’t even cover their obligations.

For context, in 2017 South Africa’s deputy finance spokesperson said about the airline that “essentially they are insolvent and should have filed for liquidation.”

While SAA was going to shrink their way into profitability by cutting money-losing routes, unfortunately not much has actually happened, and the airline continues to lose a significant amount of money.

Bottom line

The revolving door of CEOs at South African Airways continues. In many ways this is the same as the story we just saw a few days ago at Kenya Airways, where the CEO resigned as well.

It’s sad, but I don’t think anything will change at South African Airways (or Kenya Airways, or Garuda Indonesia, or Malaysia Airlines, or Alitalia, or…) until the governments get serious about a turnaround plan. It’s either that or liquidation…

 

[CAustin]

Thanks for sharing and no surprise as you say. It is a shame the government can’t do what is necessary to right the ship so to speak.

 

[sgt_zim]

The best thing that can happen for any of these airlines is for their respective governments to get the eff out of the way. When government involves itself into any commercial transaction, prices always increase. The increase may be invisible via regulation or taxation, but the increase is there nonetheless.

 

[Hogpatrol]

They just need to go BK and reorganize. In 2018 on an SAA flight from IAD to JNB, there were at least ten aft rows of empty seats and when we landed in Dakar, seats that people were sitting in were sold to people getting on, thus necessitating moving overhead bags to new locations and people moving to new seats. It was a total cluster***k. With a reservation system like that, who wants to fly them?

 

[Hearties]

What hasn’t been mentioned is the chronic level of corruption and mismanagement that has exacerbated all the genuine problems at the airline. There is no rational reason for a national “flag carrier” airline other than than to provide free flights and perks to politicians and their enormous retinues. Privatise and let the fittest survive - just as long as their is at least one other domestic airline authorised to transport firearms...

 

[flatwater bill]

An internal review at SAA 10 months ago concluded "theft is institutionalized in this company", and "corruptive rot runs deep here". If there had been 10 Rand of profit anywhere in this airline, there would have been 20 Rand of stealing. Likely a result of Apartheid. As with all other problems in RSA.....................FWB

 

[RBurg44]

So do you guys think i shouldnt book with them for next year? Too risky or what?

 

[Hogpatrol]

So do you guys think i shouldnt book with them for next year? Too risky or what?

A buddy and I are booking a trip to the Eastern Cape in May 2020 with an in country SAA flight. It's more flying and travel time but we're using Qatar from the states to Joburg. Also taking out Ripcord trip insurance.

 

[ack]

Now I'm getting scared to get on the damn thing..Is their maintenance up to date ? We're booked for Sept. this year >

 

[Philip Glass]

So do you guys think i shouldnt book with them for next year? Too risky or what?

I would not worry about it. When in RSA you have to use them for flights in RSA or to neighboring countries anyway. Other carriers don’t handle guns.