Saturday 16 January 2016

SOUTH AFRICA: Support South African Airways

SAA has appealed to the travel trade to keep supporting the airline despite current leadership instability.

“While the present challenges are unfortunate, the airline has overcome many similar challenges in the past and remains one of the longest operating airlines in the world. We call on all our valued partners for their continued support and can reassure our customers that our operations remain intact. The airline will rise and remains steadfast in its commitment to connect South Africa with the rest of the world,” spokesperson for SAA, Tlali Tlali, told TAM.

Trouble at SAA was highly publicised during the festive season period, as the gag order the airline had obtained against various media houses was set aside. An internal memo was published, which stated that if the refinancing contract proposed by SAA chairperson, Dudu Myeni, with Airbus was ratified, it could force SAA into business rescue or, even worse, liquidation.

The controversial Airbus deal also led to the dismissal of no fewer than two finance ministers. When former finance minister, Nhlanhla Nene, refused to agree with Dudu on the purchase 10 A320 aircraft instead of leasing five A330-300s, he found himself kicked to the kerb and replaced with mp, David van Rooyen. A financial crisis ensued that saw the rand collapse, and which led to David being replaced by minister Pravin Gordhan.

Despite the change of finance ministers, the stance of the treasury remained firm. A statement was issued to say that Minister Pravin Gordhan had directed the board of SAA to conclude the swap transaction with Airbus in line with approval granted in July 2015. This means that, instead of purchasing 10 A320s, SAA will lease five A330-300s from Airbus and will no longer be required to pay additional pre-delivery payments to Airbus, which would have amounted to about R603m.

“We are concerned that the unprecedented news coverage regarding the state of affairs at SAA had the effect of painting the company in a negative light,” admits Tlali. He says it is common knowledge that the airline has experienced leadership instability and this has affected the airline’s “hard-won reputation with its trade partners”.

“Despite these challenges, which we believe are not insurmountable, we wish to affirm that the airline continues to have solid and reliable operations, as it has had throughout its 81 years of existence. It is worth noting that SAA has not defaulted on any of its obligations to date and that SAA has sufficient unutilised government guarantees to provide financial support, should that support be required,” says Tlali.

He says that the airline is in the process of appointing a permanent ceo. “The announcement of a new permanent ceo is in the offing,” he told TAM, adding that the airline has also appointed an interim cfo, Phumeza Nhantsi. “We are not oblivious to the critical functions performed by these positions within the business and, as such, priority attention is given to these appointments to ensure that SAA employs people with required competencies and skills.”

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