Monday, October 8, 2012

■ SOUTH AFRICA: CEO Mzimela, two managers jump ship as press reports claim SAA likely to post $140million loss.

SAA logoSouth African Airways (SA) CEO Siza Mzimela, along with Theunis Potgieter, the carrier's Commercial General Manager and Sandra Coetzee, its Legal & Risk General Manager, today joined now ex-Chairwoman Cheryl Carolus and seven other non executive board members in jumping the SAA ship.

Minister for Public Enterprises, Malusi Gigaba's spokesman, Mayihlome Tshwete, said the resignation was “not with immediate effect” and that Mzimela would stay with the airline until a suitable interim CEO could be appointed. 

Despite reassurances last week from Minister Gigaba, the director general of the Department of Public Enterprises (DPE), Tshediso Matona, and the new Chairman of SAA, Vuyisile Kona, of their support, Mzimela still voiced misgivings about remaining in her role, hence her departure did not come as any great surprise.

Siza Mzimela
Siza Mzimela
In an email sent to SAA employees on Monday morning, Mzimela stated that “this is not a random move” adding: 
I have given this decision careful thought and feel that now is the best time to relinquish my position as your CEO and allow somebody else to pilot the company into the future.

Mzimela’s move was triggered by the resignation of SAA board chairman, Cheryl Carolus and seven of her non-executive board members ten days ago all of whom cited "a break-down in the relationship with government" as the main reason for their departure.

However, one cannot but note the strange coincidence in her's and the rest of the old board's departure in light of a report today by South African business daily, Business Day, that claims to have had a sneak preview of SAA's 2011/2012 Financial Results:
"South  African Airways (SAA) is in a far more serious financial position than previously thought and it is clear the airline will need much more than the R5bn lifeline it recently and controversially secured from the government.  

A "transition plan" the former board of directors of SAA drew up, and which Business Day has seen, shows that the airline will report a loss of ZAR1.25billion (USD140million) for the past financial year. It reveals the crippling weakness of the airline’s balance sheet — its liabilities exceed its assets by 359%."
Source [Business Day, South Africa]

Should the report prove to be true, it would directly contradict the some-what positive spin given to SAA's financial outlook as presented to the South African Parliamentary Portfolio Committee on Public Enterprises on Tuesday 28 August 2012, by Mzimela.