TWENTY-four hours before Cheryl Carolus would walk away from the position as chairwoman of the SAA board of directors on Thursday last week, she assumed a brave front in an interview with media even as it became apparent that relations between the company’s shareholder and board were collapsing around her like a pack of cards.
“It’s been a long heck of a journey,” she said. “Why SAA needs a national carrier is because someone is going to have to fly against the odds.”
She added that the industry was faced with operating margins of around 7 percent, fuel prices were rising and many airlines were cutting what they deemed unprofitable routes.
Carolus said SAA needed to embark on a bold new plan. The strategy on the table had not been rejected by Public Enterprises Minister Malusi Gigaba and Finance Minister Pravin Gordhan, but they had asked for details, she noted.
The strategy entailed new routes to Africa, Asia and Latin America where trade with South Africa had increased on the back of the Brics (Brazil, Russia, India, China, South Africa) relationship.
Although she declined to comment then on whether she would serve another term she said: “We [the board] feel quite good. It’s been a really tough time. A number of us have indicated that there’s no way we can do this again. It is quite labour-intensive.”
She resigned along with seven other directors.
Carolus stressed that SAA needed to be properly capitalised now to enable it to purchase new aircraft and execute its new strategy, which would allow it to fund the growth of its balance sheet in future.
It was a busy week for Carolus, who took chairmanship of the national airline three years ago.
Carolus told Business Day on Thursday that there was a breakdown in the relationship with the shareholder. She was under the impression the parties had agreed on a strategy.
“I’m finding it frustrating that this notion continues to exist that there is no strategic vision on the table at SAA,” she told the newspaper.
According to data compiled by the DA, SAA has received R18 billion in government bailouts in the form of cash injections or loans since the 2004/2005 financial year.
The Times quoted Gigaba as saying about the outgoing board members: “It says a lot about their integrity if they are prepared to lie in public.”
Ebrahim Khalil Hassen, a public policy analyst and editor of zapreneur.com, said: “It’s only strategic for the government to have SAA in terms of national pride. I don’t see the airline industry as a strategic enterprise in the sense that it contributes to long-term growth.”
Hassen said to its credit SAA management had improved the airline’s efficiencies in operation over the past few years.
The number of seats filled were increasing. “It is, however, in a very, very tough industry,” Hassen said. “Any business asking for a huge bailout would have to make tough decisions in terms of market position. SAA really hasn’t found a market segment it can identify with.”
On Friday Gigaba confirmed the resignation of Carolus, Russell Loubser, Bonang Mohale, Louis Rabbets, Jabulani Ndlovu, David Lewis, Teddy Daka and Maggie Whitehouse.
Gigaba said in a statement he found the resignations and their timing bizarre, especially following his prompt engagement with the board after a leak of information to media.
He had accepted all the resignations and had appointed new directors, in terms of his powers under the Companies Act, to complement the remaining directors. These were Vuyisile Kona, Andile Mabizela, Bongisizwe Mpondo, Rajesh Naithani, Carol Roskruge, Raisibe Lepule and Nonhlanhla Kubeka.
Kona would become chairman. He made headlines in 2006 when he sued SAA for R3.3 million after the carrier reneged on a promise to pay him part of a R4.7m exit package.
Kona has more than a decade of experience in the airline industry and spent six years at SAA. In 2009, he reportedly emerged as an ANC favourite to head the airline after Khaya Ngqula resigned in March that year amid tender irregularities. – Asha Speckman