And so we are back at it again. The instability at the national airline – coupled with a lack of aligned vision between its board and its group executive – paints a very troubling picture.
Take a closer look and you soon realise that SAA is flying into turbulence once more. Its vexing problems are all too familiar, but it is perhaps important to remind ourselves about the airline’s sorry state of affairs.
As things stand, SAA does not have a fully constituted board, its executive ranks are depleted and its finances are in disarray. In essence, SAA has become nothing more than a boardroom joke in the aviation industry. Its only semblance of credibility perhaps comes from its much vaunted membership of the Star Alliance. To burnish its African cred, the airline went so far as to launch a co-branded credit card with Ecobank. (So much so for national pride).
For a while now we have been fed a mantra known as the “90-day turnaround strategy”. According to its disciples, this crusade is meant to rid the airline of all evil that has seen it lurch from one misstep to the next with such great abandon.
It was partly for this reason that the Treasury was tasked last year with assuming oversight of the airline as it became apparent that the government would again face bailout requests.
While the turnaround – which includes route changes and cost containment – is said to be yielding the right results, there remains no fundamental change to the managerial deficiencies that have dogged SAA for years.
Chief executives leave as soon as they arrive. Just this week, Nico Bezuidenhout, the acting chief executive, had to make an abrupt exit, which was explained away by the airline as planned and expected.
As if that was not enough drama, the airline has come out with another shock announcement – that it has appointed its managing director of human resources as – you guessed it, yes – the acting chief executive.
On the surface, the non-stop recycling of executives goes to show that SAA is nowhere near where it should be – a stable, reliable, service-orientated, customer- focused and profitable airline. South Africans deserve that much after all the bailouts that have been given to the airline over the years.
More of the same
Under its chairwoman, Dudu Myeni, the airline does not seem to be on course to experience less turbulence than in years past. Is it really a case of more of the same? You decide how you think you might answer that question.
SAA has lost four chief executives in the past six years alone, the latest casualty being Monwabisi Kalawe, who resigned with a R2.7 million golden handshake in April after a fallout with Myeni.
In his naive mission to clip Myeni of her wings, Kalawe was even prepared to be duped by smarter people of R150 000, to convince the world that Myeni was corrupt and had millions of dollars stashed in an offshore account. So we shed crocodile tears when he was eventually found out and continued with our lives because he had dug his own grave by trying to do what no other chief executive had done before.
In came Bezuidenhout, the Mango chief executive plucked yet again from the obscurity of the low-cost airliner to act at the helm. With Bezuidenhout the situation was a little different. He was seen as a rising star whose questionable academic qualifications were publicly defended by Myeni. But he was soon packing his bags to return to Mango after complaining about some alleged interference of the board with the executive.
To Myeni’s credit, she was apparently brave enough to tell him and chief financial officer Wolf Meyer that she no longer trusted them before their brief relationship collapsed.
On Monday, Bezuidenhout was finally replaced by human resources general manager Thuli Mpshe, despite reports suggesting that he was to be replaced by general manager for operations Zukisa Ramasia.
The tumultuous relationships and the political intrigue at SAA can easily make for an entertaining spy movie blockbuster.
Instabilities
Except that it represents growing paranoia among those who are charged with leading state-owned enterprises and that there is more to the instabilities than meets the eye. It casts aspersions on whether the differences are based on disagreements in strategy or about who controls access to the multibillion-rand contracts that these people seem to fight over.
Just last month, a public fallout between Passenger Rail Agency of South Africa chairman Popo Molefe and chief executive Lucky Montana revealed the paranoid nature of operations at state enterprises. Molefe claimed knowledge of a plot to kill him, while Montana said his axing had come as a result of pressure on him to pay some connected businessmen, something which he argued was against his principles and flouted all the corporate governance rules.
In Eskom, former board chairman Zola Tsotsi suspended chief executive Tshediso Matona and three other senior managers without a wink, while insisting that there was no wrongdoing suspected on their part. By the time they were officially cleared, three, including Matona had already resigned and were given millions of rands to buy their departure.
One of the biggest challenges that Mpshe will have to deal with if she wants to make her mark at the cockpit is to satisfy an ever demanding board and try at the same time to fly the airliner safely – regardless of how much longer her acting stint lasts. In hindsight, she will probably regret the charge to act as it becomes just that – an act – with little or no real decision-making behind it.
Mpshe will need more than just her impressive credentials as a human resources practitioner to deal with the more complex issues and the ever changing dynamics of the airline industry.
This is by no means to belittle Mpshe’s credentials. Maybe, just maybe, she will bring a new dimension to the troubled airliner. After all, if reports on her résumé are anything to go by, she brings a wealth of experience in industrial relations, an impressive commerce degree and a string of post-graduate diplomas to the job.
Obligations
And she has been with the troubled airliner since 2010. She will have to be what SAA needs now – a consummate businesswoman who understands her obligations to the shareholder and a buy-in from the board will back her vision.
Her biggest problem is that in an acting capacity, she lives on borrowed time – how much or little will depend on her not crossing the line, a lesson Bezuidenhout will never forget.
For SAA, though, the abrupt reshuffles of the executive mean one thing: more turbulence. And to a keen observer it is easy to see that at the current pace, the airline will never gain altitude financially.
To say Mpshe has her work cut out would be an understatement. Perhaps SAA would have been better off casting its net beyond its fold to look for a caretaker who, for once, would bring credibility and stability to the troubled company.
SAA could have easily asked for former Airports Company of South Africa managing director, Monhla Hlahla, who has a good understanding of the aviation and airline industry and is an astute businesswoman in her own right, to steer it out of the troubled skies.
Let us hope she applies for the chief executive job when it gets advertised. But again, SAA is no ordinary enterprise and independence at the airline can be very costly. Just ask the few who have briefly graced its boardrooms.
BUSINESS REPORT