SAA won’t be privatised, no business rescue – CEO Jarana

BY: Graphic Business

SAA Chief Executive Vuyani Jarana answering questions in Parliament on July 7, 2018

But he conceded that most of SAA’s domestic routes were loss-making, saying ‘we are trying to bring back the commercial logic’.

The Chief Executive Officer of the South African Airways (SAA), Mr Vuyani Jarana, has reiterated that the country’s national airline would not be privatised.

He again ruled out the possibility of the airline being placed under business rescue.

“We need to make the business attractive to potential suitors.

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Treasury is looking to move that process forward, but we do not believe that entering into business rescue will achieve different results from what we are doing,” Mr Jarana said in response to a question at the just-ended 2018 Southern African Transport Conference (SATC) held at the Council for Scientific and Industrial Research (CSIR) International Convention Centre in Pretoria.

Mr Jarana indicated that the airline needed to amend the commercial delivery side of its operations, explaining that the framework to do that needed to be correct.

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Commercial logic

“We are trying to bring back the commercial logic.

We are in the business of moving customers from one point to another safely and comfortably, but we also have to do this profitably.

So commercial logic is about understanding the market; knowing where to fly; how we fly and how frequently we fly, while balancing customer demands and expectations.

It is also about how SAA buys assets and at what price,” he was quoted as saying in a statement.

“We are taking a comprehensive review of the heart of the business.

The good thing about SAA is that the airline’s operations are solid; it is a good airline that has a challenge with its business logic.

We have to make hard decisions as a business.

We have looked at what the market is telling us, which is that there is more demand for low-cost carrier services,” he added.

On trade union Solidarity’s steps to place SAA under business rescue, Mr Jarana said the union did so because it “wanted a sustainable national airline that would not retrench staff; which included private sector participation; and an airline that is not a burden to the fiscus”.

“We have ongoing conversations with a number of unions, although Solidarity was not a part of the conversations initially.

We brought them in to understand the context of what they are trying to achieve through the process of business rescue.

We explained that what they wanted to achieve had already been stated by the government, so there was no need to go through a business rescue,” Mr Jarana noted.

Solidarity had made a number of demands during talks between Mr Jarana and Solidarity’s Chief Executive, Mr Dirk Hermann.

“Some of the undertakings have major strategic implications for SAA,” Mr Hermann said at the time.