SAA chief executive dismisses calls for business rescue
PARLIAMENT – South African Airways (SAA) chief executive Vuyani Jarana on Thursday ruled out the possibility of the airline being placed under business rescue.
“We believe we are already executing a recovery plan. We don’t believe the plan [from business rescue practitioners] is going to be significantly different,” Jarana told Parliament’s standing committee on finance which he was briefing on the cash-strapped airline’s fourth quarter (Q4)results.
He confirmed to MPs the net loss of the airline for Q4 was R1.2 billion more than was budgeted. This was due to a number of factors, most notably lower passenger numbers, lower fares, and higher operating costs being driven by increased fuel costs.
In the short term, Jarana said they’ve shifted four aircrafts to its low cost operator, Mango, to address the fact that SAA has excess capacity. The airline has also reviewed unprofitable routes, which include reducing the frequency of its flights to London and central Africa.
“We’ve taken hard decisions and we are seeing results coming through,” he said.
The airline was talking to unions ahead of possible restructuring.
“We do have excess pilots,” Jarana said, adding they were speaking to other airlines to possibly take on pilots until SAA nurses itself back to health.
SAA’s biggest challenge was its going concern status and ensuring financial stability. To do this, Jarana reiterated, the airline needed a capital injection to fund the new corporate plan.
“We said we need R12.5 bln in the next three years…based on analysis and timetable for this.”
“When we plot the plan over the five years, we said given our assumptions…in three years time we should break even.”
– African News Agency (ANA)
Source: iol.co.za