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JOHANNESBURG — Vuyani Jarana has 22 years experience as a telecoms veteran, having spent all of this time with Vodacom. While the telecoms industry has had its own challenges such falling voice revenues and challenges with regulations, the airline industry no doubt is much tougher. Margins (if they exist at all) are razor-thin and the market is increasingly competitive. Jarana, as new SAA CEO, will have his hands full then. There’s no doubt that SAA will be the biggest challenge of his life. He’s a brave man; all South Africans will be hoping he can succeed. Otherwise, the government will increasingly have no other option but to shut down SAA. – Gareth van Zyl
By Loni Prinsloo and Arabile Gumede
(Bloomberg) — The chief executive officer-elect of South African Airways is making it his first priority to convince banks that the state-owned carrier’s new leadership is committed to stemming five straight years of losses and repaying its debt.
Lenders and other stakeholders need to be assured that “there is a plan that is plausible for SAA,” Vuyani Jarana said in an interview in Johannesburg. “It’s a public-interest company, you have your lenders who are as important as your shareholder.”
Jarana, 46, is due to become SAA’s first permanent CEO since 2015 when he joins the airline from Vodacom Group Ltd., South Africa’s largest wireless carrier, where he previously held the position of CEO of its business division. His appointment comes after Citigroup and Standard Chartered both refused to extend loan terms for SAA, which hasn’t made a profit since 2011 and has been surviving off government bailouts and guarantees.
“There is a strategy in place to stop the bleeding and I am confident that it will succeed, and that we can negotiate plans for refinancing,” said Jarana. “The exciting part will be in re-engineering the commercial and growth strategy and improving customer satisfaction at SAA.”
SAA has been run on an acting basis by Chief Technical Officer Musa Zwane, who was the seventh permanent or temporary CEO of the airline since 2010. Chairwoman Duduzile Myeni, a former schoolteacher who also heads President Jacob Zuma’s charitable foundation, has been on the airline’s board since 2009 and acted as the board’s chair until her permanent appointment in 2015. Her contract was renewed for a year in September 2016.
— Kgosiemang Phejane (@Donaldphejane) August 3, 2017
“It is time for a new person in that position,” Finance Minister Malusi Gigaba said earlier this month. The airline needs a recapitalization of at least R10bn ($768m) and there are plans to strengthen the board, he said. It is in talks with lenders about R6.9bn of loans coming due by the end of next month. The government is considering options about reducing its 39 percent stake in Telkom, the country’s largest fixed-line operator said on Wednesday, which could be used to fund SAA.
The airline hasn’t started preparing its annual financial statements because it is waiting for the capital injection from the government, Johannesburg-based Business Day reported on Friday, without saying where it got the information. Myeni, whose term ended on Aug. 31, will serve until the next annual general meeting, the newspaper said, adding that SAA has asked the finance ministry to postpone the AGM to January.
Jarana, who still needs to serve out his notice period at Vodacom, the terms of which haven’t been disclosed, said he will ensure he surrounds himself with the right people to turn around the debt-laden airline. “I would want to see more people with airline and international experience joining me at SAA,” he said.
“There will be no miracles at SAA,” Jarana said. “You need management and a board that is committed to transform the airline and return it to profitability.”
Vodacom press statement:
Jarana to depart Vodacom after 22 years
JOHANNESBURG – Vodacom Group announces that Vuyani Jarana, Chief Officer of Vodacom Business, has officially tendered his resignation and will serve a notice period before leaving the organisation to join South African Airways after 22 years of service.
Commenting on the announcement, Vodacom Group Chief Executive Officer Shameel Joosub said: “The Executive Committee of Vodacom Group and I would like to thank Vuyani for the contribution that he has made to the Group as a member of our Exco. Vuyani’s appointment at SAA is testament to his diligence, foresight and visionary approach to sustainable development and his commitment to transforming Vodacom Business into the leading Pan African unit that it is today. Vuyani has been instrumental in building a strong team and we wish him well in his future endeavours.”
Jarana joined Vodacom as Network Controller in 1995 and served in a number of executive positions culminating in his appointment as Chief Officer of Vodacom Business in September 2012.
Commenting on his appointment, Jarana said: “I have thoroughly enjoyed my time at Vodacom and am proud of the success that the Vodacom Business team has delivered, particularly over the past two years. To serve as Chief Executive Officer of SAA is a great honour and I am under no illusion that this will be the most challenging phase of my personal journey thus far. Nonetheless, the mandate to drive the turnaround of SA’s national carrier is an opportunity I simply couldn’t decline.”
Vodacom and Jarana are committed to ensuring a smooth transition and will finalise Jarana’s departure date in due course. Vodacom has commenced the process to identify Jarana’s successor and will make an announcement once this runs its course.
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