Time for serious decisions on SAA
The resignation of Vuyani Jarana as SAA’s CEO – the 13th since 1998 – is a symptom of an unfixable mess that will require a completely new approach to address this expensive and inefficient state-owned entity.
The past 11 years have seen Government pump around R50bn into the airline to keep it afloat. “We simply can’t afford to keep SAA as a wholly Government-owned entity,” says Heinrich Volmink, OUTA’s Executive Director, National Division. “Just as we did with Telkom, the time has arrived to allow an external partner with experience in efficient airline management to take a stake in the airline, if it is going to survive.”
Airlines are complex entities that require a strong and highly experienced leadership to manage and compete with other operators, if they are going to run profitably. It is a highly competitive industry and the new SAA leadership will need to act efficiently, independently and in the interest of the airline – this would entail freedom from political interference.
If we are to recover economically, South Africa cannot afford to lose more money on failing state-owned entities.
OUTA is not surprised by Mr Jarana’s resignation given the obstacles he faced in carrying out his duties. A successful turnaround at SAA will require all hands on deck. This includes bringing labour unions on board, as the solutions will require a balance between job protection and cost reduction. We trust that Government will now use this opportunity to make some hard decisions about the future of the airline.