CAPE TOWN - South African Airways CEO, Vuyani Jarana reportedly told Cape Talk that if he cannot turn SAA around then he will pledge R100 000 of his own money to charity.
Speaking to breakfast show host Bongani Bingwa, Jarana told Cape Talk today that the airline can be fixed.
However, Bingwa noted that the fact that SAA has faced great losses which include losing nearly 300 000 passengers, 6 consecutive years of losses and 6 billion worth of bailouts
“Well I think what’s critical for me is when I looked at SAA, I realised that its a airline that is fixable in terms of the ratios, revenue and also expenses”, said Jarana.
“It’s a national airline and you’ve got airlines that are surviving today in the same market and that the african travel market is increasing despite the challenges of SAA so if there’s growth in the market, it says that there’s an opportunity for all of us to participate and I think if we fix ourselves internally SAA will have a chance to participate
“Effectively, we need to fix the commercial side of the business”
He also cleared assumptions that politicians utilise the airline for free, saying that they pay and only staff get rebates.
Jarana then addressed the fact that job losses is inevitable as the airline attempts to cut back on cost.
“As we look at procurement benefits, restructuring the staff and restructuring headcount is inevitable. In terms of where and how, that is what we are going through.
Finally, Jarana reportedly said that he will pledge R100 000 of his own money to charity if he cannot turn SAA around.
Meanwhile, in March this year, it was reported that the National airline SAA was in a much deeper financial crisis than previously thought, with Auditor-General Kimi Makwetu reporting that it had suffered losses to the tune of R5.5billion last year - much higher than the R1.47bn it reported in 2016.
Makwetu said that the history of the losses, lack of working capital and volatility in foreign exchange controls, created material uncertainty on the company’s ability to continue as a going concern.
He gave SAA a qualified audit opinion, meaning he could also not find some of the records of the assets of the airline.
He said the airline’s liabilities exceeded its assets by R17.8bn - up from R12.3bn in 2015/16.
“As noted in note 50, six consecutive years of operating losses have further eroded the capital base, and this continues to impact on the entity’s ability to operate in a highly demanding and competitive environment,” Makwetu said.
The results of the airline were tabled in Parliament yesterday after they were delayed by former minister of finance Malusi Gigaba in September.
Gigaba had asked for a postponement until January 28, but he asked for another extension from Speaker Baleka Mbete until April.
The latest loss was the sixth in a row by the embattled airline.
SAA was in trouble with the lenders who last year demanded changes to the airline before extending the loans.
Talks have been going on to merge SAA with SA Express and Mango to strengthen their balance sheet.
Baines & Company completed a report on its study for the merger of the airlines.
Makwetu said the lack of documents made it difficult for him to confirm the veracity of the assets and the inventory.
He said maintenance costs were understated by R282million, trade and other payables were understated by R226m, provisions were understated by R135m and trade and other receivables were understated by R148m.
He said there were no records for irregular, fruitless and wasteful expenditure.
- BUSINESS REPORT ONLINE