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Cape Town – South African Airways (SAA) is still in negotiations with Vodacom over its contract with the state-owned airline’s newly appointed chief executive Vuyani Jarana.
Jarana, who has officially signed his contract with SAA, must first serve out his notice period at Vodacom, which has not been disclosed. However, National Treasury was hoping he would start in October. National Treasury first announced his appointment on August 3.
SAA spokesperson Tlali Tlali told Fin24 on Thursday that the airline has yet to be informed of a starting date for Jarana.
“There is an engagement with the current employer, because the termination of his employment requires he must serve notice,” he said. “There is a negotiation process for the parties to find ways around that.”
Tlali said SAA is looking forward to Jarana’s arrival, as it will bring certainty to the embattled airline. “It will be a relief as it will give us a sense of stability and certainty,” he said.
Tlali said criticism that SAA has failed to implement its turnaround strategy is partly linked to a lack of consistent leadership at the chief executive level. “The lack of consistency of implementation has been due to changes at the execution level,” he said.
SAA said it has had eight CEOs over an 11-year period, including the incumbent acting CEO, Musa Zwane, who was appointed on 14 November 2015. The airline has paid close to R23m in separation packages to chief executives and chief financial officers who did not complete their contracts.
"Whenever you have someone who is occupying a position of a chief executive, you want sense of certainty around their stay,” said Tlali. “There are certain things that relate to executive of strategy and you want someone to see it through.
“Caretaker CEOs are there for a limited period of time and they are not there for the long haul,” he said. “A permanent CEO gives you latitude for the implementation of strategy.”
When Jarana was appointed, he said he wants to see more people with airline and international experience joining him at SAA. “There will be no miracles at SAA,” Jarana told Bloomberg. “You need management and a board that is committed to transform the airline and return it to profitability.”
Jarana has a mighty task when he starts. SAA recorded a loss of R1.5bn in 2015/16 which spiked to R4.7bn in 2016/17.
It will likely receive a R10bn bailout from Treasury soon, which will be used to repay lenders and pay suppliers.
SAA chairperson Dudu Myeni, whose extended contract has been deemed illegal by the Companies and Intellectual Properties Commission, will likely be heading the board when Jarana assumes his role.
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