File Image: THOBILE MATHONSI, IOL

CAPE TOWN - The lack of aviation expertise in the current SAA board will mean that the national carrier’s newly appointed chief executive, Vuyani Jarana, will have a tough time trying to turn around the ailing company’s fortunes.


Former Skywise co-chairperson Javed Malik said on Friday that Jarana’s finite experience in the industry, coupled with that of the board, would result in the status quo at the cash-burning national carrier staying firmly intact.

“It is going to be very challenging for Jarana, who comes from a company that does not struggle with cash flow, to understand the intricacies of a state-owned enterprise (SOE), especially SAA, which is struggling for cash, said Malik. 

The ill-fated Skywise ceased operations in November last year, after the Airports Company of SA (ACSA) challenged it for unpaid fees.

Despite this, the high turnover of chief executives has not resulted in improved fortunes for SAA and the airline is now in need of a R13 billion recapitalisation from Treasury. 

The latter said it would announce its decision in its Medium-Term Budget Policy Statement in October.

Meanwhile, Finance Minister Malusi Gigaba told legislators on Friday that he was looking at bringing the suitable expertise to the SAA board, but denounced the appointment of other key executives before Jarana.

“I am undertaking an independent shareholder review so I can get a proper assessment of the board and then be able to take a decision on how to tighten the board and how to restructure it.

“The board has taken steps which ordinarily one would say they should have waited (to effect) until there was a new chief executive. This is with regard to the appointment of the chief restructuring officer and the recruitment of the chief commercial officer ordinarily, the chief executive should have been party to these appointments,” Gigaba said.

The current 11 non-executive SAA board members were appointed last September for three years. 

According to a government statement at the time which declared that the new board brought with them a wide array of skills that included finance; management of risk treasury, investment and projects; business strategy; marketing and management.

However, the board will soon have a new chairperson, after Gigaba indicated that its chairperson would no longer serve after her term expires in September.

In the current board, only Thandeka Mgoduso had prior aviation experience, as she served on the Air Traffic Navigation board.

Peter Attard Montalto, research analyst at Nomura, said investors were increasingly unlikely to approve turnaround strategies at SAA until they delivered results.

“We note the announcement of a new chairperson and chief executive for SAA as well as new board and chief executive at Eskom, but we see this as stabilisation at a weak place, rather than a turnaround. We also need to watch for a ‘sandwich effect’ at SOEs, where some parts of boards and executive management are replaced with potentially weaker members,” Montalto said.

Meanwhile, the National Union of Metal Workers of SA (Numsa) called on the entire board on Friday to step down.

Numsa general secretary Irvin Jim said: “We demand that the minister of finance remove the entire SAA board as it has failed in its fiduciary duty to ensure good, clean governance. We demand that the board be reconstituted by members of civil society, trade unions, labour and government representatives to ensure transparency and good governance.”

- BUSINESS REPORT