New SAA CEO Vuyani Jarana, says his embattled airline now has “a clear strategy and clear path to profitability” defined by the board. Jarana, who became SAA’s first permanent CEO in three years when he started in November, said in a statement: “We are looking at a three-year window to get to a break-even point. We continue to revise the strategy as we see new opportunities.”
Last month the national carrier halved the number of flights between Johannesburg and London’s Heathrow Airport and last year the airline also cancelled or reduced the frequency of flights to African capitals, including Abuja (the capital of Nigeria), Luanda (Angola) and Kinshasa (Democratic Republic of the Congo).
TourismUpdate quotes SAA’s most recent annual report, which states that SAA has a fleet of more than 50 aircraft (many sources say the majority of these are in fact leased – Ed.) and flies to cities in 25 countries. The tourism website says a turnaround strategy for the embattled state-owned airline is among the most pressing items in the in-tray of newly appointed Finance Minister, Nhlanhla Nene.
Nene will be performing miracles if he could avoid a repeat of the government bailout approved by his predecessor, Malusi Gigaba. In the year through March 2017, the airline’s net loss increased more than three-fold to R5,6bn, with liabilities exceeding assets by about R17,8bn, according to a document signed by South Africa’s Auditor General, Kimi Makwetu.
Meanwhile the Auditor General warned that SAA might not be able to operate as a going concern. “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.”
