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JOHANNESBURG — SAA’s financial crisis bring to mind the famous Nat King Cole song; Straighten up and Fly Right. The zig-zag financial navigation of SAA requires not the minute constant course correction of an intercontinental pilot (or of an automated system), but an almost 180-degree turnabout with emergency vehicles on standby on the nearest landing strip. Basically, SAA was on a disastrous course during the Zuptoid years with a succession of inept top managers and seriously shaky corporate decisions. The worst was under former SAA Chairwoman, Dudu Myeni, an intimate friend of Jacob Zuma and manager of his charitable foundation. The Auditor General was scathing in his assessment of her management. Under Myeni, the carrier’s losses last year increased three-fold to R5,6 billion. Now SAA’s new chief, Vuyani Jayana wants a bail-out for that amount from the government which is desperately seeking a private equity partner for the airline to hopefully mitigate that cost. Well, at least the Zuptoid choke-hold has been broken. It remains to be seen whether SAA can straighten up and fly right. – Chris Bateman
By Paul Vecchiatto
(Bloomberg) – South African Airways appealed to the government for R5 billion ($404 million) to cover immediate costs and warned that it may be unable to make debt repayments next year as the state carrier battles to stay in operation.
Chief Executive Officer Vuyani Jarana is at the early stage of a turnaround plan designed to return the carrier to break even by 2020 and ease dependency on the government, which last year approved a bailout to swerve a default on debt owed to Citigroup Inc. The airline has shaken up the board and cut routes to reduce costs but is yet to emerge from a state of financial stage.
“We need the money now,” Jarana told reporters in Cape Town Tuesday. He’d earlier told lawmakers that SAA would struggle to meet R9.2 billion in debt payments due March 2019, though he added that the government is in talks to find a private-equity partner for the airline.
South African Airways is one of the companies at the center of a probe by lawmakers into the mismanagement of funds at state-owned entities under the administration of former President Jacob Zuma.
The portfolio committee on public enterprises last month reiterated its intent to serve summons to former SAA Chairwoman Dudu Myeni, a Zuma associate who ran his charitable foundation. Under Myeni, the airline failed to properly value assets or correctly record irregular or wasteful expenditure, according to a report by the auditor general.
The carrier’s net loss widened more than threefold to R5.6 billion in the 2017 financial year. The airline suspended two executives including Chief Financial Officer Phumeza Nhantsi in March.
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