Thursday, April 4, 2013

■ SOUTH AFRICA: SAA officially hands over Turnaround Plan #9 to Government for approval.

SAA logoSouth African Airways (SA) has submitted its Long-term Turnaround Strategy, its 9th in 13 years, to the Public Enterprises Minister, Malusi Gigaba. The handover was made yesterday to the Minister by Ms. Dudu Myeni, the acting Chairperson of the SAA Board of Directors on behalf of the airline and comes as one of the preset conditions the airline had to ascent to when it received its USD600million bail out from Pretoria.

The submission of the strategy is in line with Minister Gigaba’s directive issued on 15 October 2012 during the airline’s Annual General Meeting. Minister Gigaba indicated that SAA must develop and submit a long term turnaround strategy aimed at improving the airline’s financial sustainability and operational efficiency.
South African AirwaysThis is the first, all-encompassing strategy for the airline and a defining moment in SAA’s 79 years of existence. The strategy will be followed by a comprehensive implementation plan aimed at ensuring successful delivery of its objectives, once reviewed by the Department of Public Enterprises,” said Ms. Myeni.
There will be a three-phase implementation approach of the strategy with continuous and cyclical monitoring and review over a twenty year period. There will be specific and measurable outcomes in each of the three implementation phases (short, medium and long term). Consequently, the impact will be felt from year one of the implementation whilst other interventions will take place in the medium and long term phases of the strategy.
One of the key elements of the strategy is increased focus and emphasis on governance and accountability. These will go a long way in restoring SAA’s reputation in the global markets and among its stakeholders,” Myeni added.
Details of the strategy will be shared with the media and the public at large once the Department of Public Enterprises has had the opportunity to digest its contents and endorsement received from the National Treasury.

Given the airline's heavy loss incurring divisions, in particular SAA Technical which posted a ZAR522million loss last year, it is understood that any likely restructuring of the struggling airline will, therefore, not be confined to airline operations alone. The airline's route network too will likely fall under the spot light, with the airline's problematic European routes in particular, coming under scrutiny. However, as a government-backed airline, SAA will likely have to tow the line regarding the operation of certain routes, which although not profitable, are crucial both diplomatically and strategically.

Meanwhile, the African aviation community waits with baited breath for the announcement of SAA's new CEO. Deliberations were due to have ended in late March with a decision due to have been made public by the first week of April.