South African Airways (SAA) is to undergo a range of measures to improve finances and efficiencies, as acting Chief Executive Officer Vuyisile Kona decides action is needed to save the state-owned airline.

Kona on Monday revealed that he has been developing a number of “interim measures” to turn the airline’s fate around, including efforts to streamline spending, improve efficiencies and stabilise the company overall.

“Our chairperson (Dudu Myeni) has told us she wants us to do more; it cannot be business as usual at SAA,” said Kona, reports Business Day.

“We are going through difficult times, and we are trying to get our house in order — that is why we are pushing ourselves to be as operationally efficient as possible because we can’t just go out and borrow money,” he added.

Kona further revealed that the package of measures – being developed in conjunction with the Board and the company’s shareholder, the Department of Public Enterprises – would be part of a long-term strategy to turn around SAA’s fortunes, which is to be presented to the country’s Public Enterprises Minister Malusi Gigaba in March.

The state-owned airline has been flailing for some time now, despite repeated bail-outs from the government.  Most recently, the Board requested a 4 billion-6 billion rand ($480 million – $720 million) bail-out from the government in September, prompting a dispute which saw eight Board members – including then Board Chairwoman Cheryl Carolus – walk out on the company.

Despite a new Board being appointed by Gigaba personally, in December, in response to a lull in passenger numbers, SAA took on a 550 million rand ($64 million) loan from banks in order to finance its monthly dues – a debt which needs to be paid off within three months, adding to the airline’s financial pressures.

According to Kona, the carrier pays at least 540 million rand ($62.9 million) per month on fuel costs alone, with significiant other outgoings also ramping up the costs of the company.  Pushing these costs down will be a focal point of measures being developed, if the company is to be viable in the future.


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