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CAPE TOWN — It’s almost becoming cliched to say the Zuptoid/Gupta decade of decay involved corruption on an industrial scale, but when SAA’s new CEO announces he is comfortable with revenues but is now focussing on “leakages due to malfeasance,” his budgeting for losses over and above the current R6 billion to 2021 begins to make sense. With government bankrolling SAA because banks refuse to lend it any more money, the harsh reality of discovering anew its economic responsibilities has finally set in. Would that the ruling party stops trying to centralise control and fool itself that it can do a better job than the private sector in making ends meet. There are however indications that there’s been some sobering up at SAA with a fuel-hedging strategy and the selling off its catering unit and/or its cargo operations being considered. It would perhaps be a bit harsh to say “at last!” given that the new corporate regime has only just taken over the cockpit from the Myeni/Zuptoid hijackers. However, it is certainly not too much to ask that those guilty of the malfeasance that the new pilot is battling with, be charged, tried and put behind bars. – Chris Bateman
By Paul Burkhardt
(Bloomberg) – South African Airways is making progress with its plan to reach profitability in the next three years, even as it faces challenges such as a jump in fuel prices, Chief Executive Officer Vuyani Jarana said in an interview.
Jarana said he expects losses until the company can break even or achieve profitability at the end of the 2021 financial year as the embattled state-owned airline improves its revenue.
“I’m still quite comfortable about the execution of the plan,’’ Jarana said late Sunday.
The airline reported a loss of R5.7 billion ($398 million) in the year ended in March, more than double what it had budgeted, and received a government bailout last year to avoid a default on debt owed to Citigroup Inc.
The management is considering a sale of the airline’s catering unit, Air Chefs, and outsourcing or selling SAA Cargo, the Johannesburg-based City Press reported Sunday, citing an internal report. It’s also headed to record a R6 billion loss.
The CEO said the leaked document outlines scenarios but no final decisions have been made. He pointed out the the company’s own corporate plan forecasts losses for the next several years.
“On revenue we’re quite happy, but other aspects are more difficult,” he said in an interview.
SAA is watching to see what competitors do about fuel hedging strategy, an unanticipated issue that’s emerged with higher oil prices, he said. The airline has used a hedging policy, “but it’s not an aggressive one,” Jarana said.
The airline’s international business and supply chain reform are core strategy topics, he said.
“We’re focusing a lot on areas where there are revenue leakages due to malfeasance,” he said.