Wednesday, September 26, 2012

■ SOUTH AFRICA: Heads to roll at SAA & SA Express as neither are able to present their FY 2011/12 annual reports by September 30.

SAA logoReports coming out of South Africa suggest that South African Airways (SA) is set for a top level shake-up in the near future. The looming shake up comes after a woeful presentation by SAA last week, in which it sought further government aid in the form of a USD750million bail out, failed to impress neither the South African Minister for Public Enterprises, Malusi Gigaba, nor Finance Minister Pravin Gordhan both of whom stipulated that management would have to rethink their future action plan and come up with a better one if it was to secure the funds.

Additionally, new reports this week shed light on the contents of a letter sent to the Speaker of Parliament, Max Sisulu, by Minister Gigaba which the revealed that neither SAA nor sister airline South African Express (XZ) would be able to present their FY 2011/12 annual reports by the September 30 deadline, as stipulated by the Public Finance Management Act under South African law.
"Accordingly I postponed the AGM (annual general meeting), as SAA has not been able to finalise the 2012 annual report in order to meet legislative requirements. To this end, my department is in discussions with the National Treasury to find a resolution to the financial challenges of the airline," Mr Gigaba’s letter said.

Malusi Gigaba
Malusi Gigaba (News24)
In a statement to the press, Cabinet spokeswoman Phumla Williams said names were put to the cabinet, with Gigaba due to make an announcement in due course. Thus far, nominations for dismissal at SAA are said to be Andile Khumalo, Raisibe Lepule, Patrick Dlamini, Vuyisile Kona (a former head of SAA subsidiaries) and Carol Roskruge, though it is unclear what this means for chairwoman Cheryl Carolus, who only took over in 2009.

Two weeks ago, Comair Ltd's Erik Venter, whilst presenting his company's annual financial report, took particular exception to the lopsided nature of South Africa's aviation industry, by attacking state-owned airlines like South African Airways (SA), SA Express and SA Airlink and their continuous requests for government funding, saying they posed a serious threat to the viability of private airlines.

Perhaps the penny has finally dropped?