In a statement released by Mr John Lamola, Executive Chairmen of SAA, he said he has noted news reporting centred around remarks made by the Acting Director General of the Department of Public Enterprises, Ms Jacky Molisane on the future of SAA in relation to the prospects of the successful closure of the implementation of the strategic equity partnership with the Takatso Consortium.
Mr Lamola claims that news that SAA will be liquidated if the SEP transaction is not concluded has been taken out of context, and the import of the statement made by the Acting DG is exaggerated and blown out of proportion. Elsewhere, Ms Molisane is quoted saying that “if the deal falls through, if the government cannot put more money into SAA, then the option we have all worked hard to avoid would have to be taken and that is the liquidation of SAA”.
Mr Lamola further claimed that he is in constant contact with the Acting DG. Her views, which are based on continuous management of all the regulatory, legal and commercial processes common to transactions of this nature are aligned with those of the Board of SAA. The SAA Board is constantly monitoring and assessing the corporate risks associated with this transitional period SAA is going through.
On Wednesday 21st September 2022 SAA and the DPE made a scheduled presentation to Parliament’s Portfolio Committee on Public Enterprises on SAA’s 2017/18 annual financial statements. An ancillary question related to the progress on the SEP transaction in relation to funds outstanding from the National Treasury for the conclusion of SAA’s Business Rescue Plan, answered by the Acting DG, according to Lamola, led to a press story casting an impression that the future of SAA is in peril.
“Typical of normal corporate governance protocols, a high-level risk management process involving both the DPE and SAA Board has been put in place to charter the future of SAA since the airline emerged out of Business Rescue with a restructuring solution that entails the introduction of a private strategic equity partner to this State-Owned-Company. The transaction is beset with delays emanating from legal requirements to comply with aviation regulatory conditions, and the Competition Commission. We can confirm that both SAA and the DPE are working on a time horizon of end of March 2023 for the substantive conclusion of the transaction, as this period marks a reportable end of the current financial year 2022/23 for SAA.” Mr Lamola added.
Since the relaunch of the airline operations in September 2021 the Board has tasked SAA management to run the airline as a fully-fledged airline in compliance with legally imposed safety requirements, and as a business enterprise competing for its market share and profitability. In addition, in line with the requirement of the Public Finance Management Act, SAA had to prepare and submit a 3-year Corporate Plan to National Treasury.
In an attempt to downplay the reports Lamola insisted that after a year of operations, the board are more than satisfied that they have built the foundation for a sustainable and growing airline business. Mr Lamola further claims that the loyalty of customers has been restored, and the rest of Africa is proud to see SAA back in the skies.
He further claimed that SAA is currently implementing plans to increase its fleet of aircraft, and with its corporate partners, they plan to modernise the customer experience offering, including the renovation of airport lounges. Mr Lamola stated that SAA has also successfully increased their code-share partnerships and deepened its standing with the global Star Alliance network and the International Air Transport Association (IATA).
Executing its fiduciary responsibilities in relation to judicious and prudential risk management, as enjoined in both the PFMA and the Companies Act 71 of 2008, the Board of SAA has over time been seized with the task of simulating a number of scenarios on the future of the airline. Lamola claims that the outcomes of this risk management exercise are what has invigorated SAA management into its current single-minded focus of working for an operationally and financially successful airline. The fact that the delays in the National Treasury’s provision of the reported R3.5 billion have not negatively affected the life and growth of the restarted airline bears testimony to the resilience of SAA’s current business model.
Mr Lamola reassured the tax-paying South African that SAA Board will do everything in its power to ensure SAA survives. He further claimed that the SAA with an overhead cost structure and operating model that has been restructured by the Business Rescue process and transformed management culture is poised for sustained growth.
SAA management assured that there is a variety of resources within the company and the global aviation industry that can be innovatively exploited for the future success of SAA. They assure customers and all stakeholders and partners that there are no plans, nor an intention to see South African Airways liquidated.