Johannesburg - SAA was having to deal with conflicting orders from Finance Minister Pravin Gordhan and President Jacob Zuma and that was hindering the unprofitable state-owned airline from making a full recovery, acting chief executive Musa Zwane said.
The carrier needed firm decisions on whether SAA should be privatised, how it should be capitalised, the make-up of a new board and a new chief, Zwane said.
Read: Fedusa, Gordhan to discuss SAA's future
The former head of the airline’s maintenance unit said he had not put his name forward for the permanent position, and a short-list for his successor was being discussed by the Treasury.
“You have conflicting messages: the minister in his budget says this, and then the president says something different,” Zwane said in Dublin at the International Air Transport Association’s annual gathering. “This is not a tough role, but I think if you look at the dynamics of the role and the role-players, they make it tough.”
Different messages
Treasury director-general Lungisa Fuzile said on Friday on CNBC Africa that South Africa would decide by the end of this year which state-owned companies would be privatised or closed as the government cut spending amid slow economic growth.
“I can say without fear of contradiction, before the end of this year, it will be possible to go beyond just the technical analysis and reporting and begin now to point at which entities have got to fold and which ones must be merged,” Fuzile said.
Zuma’s spokesman Bongani Ngqulunga did not answer to a message seeking comment.
Treasury spokeswoman Phumza Macanda did not respond to an e-mail, phone call and text message seeking comment.
During his Budget speech in February, Gordhan said the government was considering merging SAA and SA Express and selling a stake in the enlarged carrier to private investors. In contrast, Zuma said on a visit to SAA’s headquarters last month that the government would never sell or privatise the carrier.
Zuma reinstated Gordhan as finance minister four days after the rand and government bonds plunged following his decision in December to remove Nhlanhla Nene from the post.
Last month he denied that he and Gordhan were involved in a power struggle over control of the Treasury.
Zwane said SAA had met a R1.1 billion annual cost-reduction target. Zwane, who has yet to finalise the airline’s financial results for the year to March 2015, said sales were not “as bad as we budgeted (them) to be”, without giving further details. SAA had sales of R28.7 billion in the year to March 2014, according to data compiled by Bloomberg.
Instability at SAA, which has had seven acting chief executives in less than four years, escalated when chairwoman Dudu Myeni attempted to renege on a leasing contract with Airbus Group last year.
The airline, which came under the Treasury’s oversight in 2014, was later ordered by Gordhan to honour its agreement.
The carrier is cutting unprofitable routes, including Johannesburg to Abu Dhabi, ending a year-old partnership with Etihad Airways.
It
is also reducing capacity.
SAA hasn’t made a profit since 2011.
Zwane is attempting to restructure SAA’s debt to reduce the interest rate charged on loans to less than 6 percent from an average of 8 percent, he said.
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