http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.34Change: -0.05
R/$ = 12.15Change: 0.01
Au 1188.90 $/ozChange: 0.40
Pt 1112.00 $/ozChange: -4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Oct 15, 2012

Gigaba hints to yet more SAA support, but wants new plan first

Back
Public Enterprises Minister Malusi Gigaba on the role of a task team in devising a new turnaround plan for SAA. Camera Work & Editing: Darlene Creamer. Recorded: 15.10.2012.
Public Enterprises Minister Malusi Gigaba responds to concerns over a possible blurring of corporate responsibilities at SAA. Camera Work & Editing: Darlene Creamer. Recorded: 16.10.2012.
previous next
 
 
 
 
 
Flow|Mango|Public Enterprises|Road|South African Airways|South African Express|transport|Airline|Flow|Route Network|Well-run Airline|Adam Seeda|Malusi Gigaba|Nico Bezuidenhout|Siza Mzimela|Vuyisile Kona
Flow|Road|transport|Flow||
flow-company|mango|public-enterprises|road|south-african-airways|south-african-express|transport|airline|flow-industry-term|route-network|well-run-airline|adam-seeda|malusi-gigaba|nico-bezuidenhout|siza-mzimela|vuyisile-kona
© Reuse this



Public Enterprises Minister Malusi Gigaba has set a December 15 deadline for the delivery of a “road map” for turning around loss-making national carrier South African Airways (SAA), which reported another loss of R1.3-billion in 2011/12, contributing to cumulative losses of around R14-billion over the past few years.

The State-owned airline had, over a ten-year period, also received cumulative shareholder support of more than R15-billion to facilitate its survival and was recently granted a controversial R5-billion guarantee from the National Treasury to stave off immediate liquidity threats.

Gigaba hinted to yet further “shareholder support” on Monday, which could flow on the back of a “robust” plan that delivers financial independence, operational efficiency and a long-term strategy to “become a competitive and well-run airline”.

The “immediate” focus, though, would be on cost cutting and revenue enhancement measures to stabilise the business, whose 6% rise in revenue to R23.9-billion in 2011/12 was more than offset by a 17% rise in operating costs to R25.2-billion. The “cash burn” was so intense during the year that the airline’s cash and cash equivalents fell from R2.3-billion in the previous financial year to a negative R33-million by the end of March, 2012.

However, the business model, structure and strategy would also be reviewed by a Ministerial task team led by SAA’s current executive chairperson Vuyisile Kona, the chairperson and the CEO of South African Express respectively, Andile Mabizela and Inati Ntshanga, Mango CEO Nico Bezuidenhout and acting deputy director-general for transport enterprises at the Department of Public Enterprises, Adam Seedat.

The task team would provide the Minister with “a consolidated view on the critical success factors for the turnaround”, as a well as a turnaround plan.

The plan would have to show how SAA could be made independent of government support over the medium term; outline a route network and fleet plan that ensured earnings made domestically and regionally were not “rubbished” by losses associated with long-haul routes; and incorporate safeguards against exogenous shocks, such as the rise in fuel costs. In 2011/12, fuel costs rose 36% from R6.1-billion to R8.3-billion.

The task team would also interrogate bottlenecks in the decision-making processes at the level of the shareholder, particularly where these impeded flexibility and the implementation of decisions that were urgent for the commercial viability of the airline.

Gigaba indicated that he was sensitive to a possible “blurring” of roles between the shareholder, the board and the executive and said he was studying a board-led submission to him on how to mitigate that risk.

Deadlines for both the finalisation of the turnaround plan and the selection of a new CEO, following the October 8 resignation of Siza Mzimela, were held up as key to ensuring that the roles were not distorted.

The new SAA board would need to complete the selection and recruitment of a new CEO within three months.

Agreement had also been obtained from the remaining executives that there would be an increase in remuneration packages for the foreseeable future.

“I am determined to see to it that SAA gets on the path towards recovery. We do not have the luxury to fail and I shall, hence, brook no indecision on anybody’s part,” Gigaba stressed.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 1 hour 24 minutes ago All grades of petrol will increase by 47c/ℓ on Wednesday, the Department of Energy announced on Friday. The reef price for unleaded 93 and LRP petrol was currently standing at R12.61/ℓ, while unleaded 95 cost R12.89/ℓ.
Updated 1 hour 26 minutes ago JSE-listed Tower Property Fund has acquired the Link Hills Shopping Centre, in Waterfall, KwaZulu-Natal for R160.9-million from The Sabre Trust and Matlu Family Trust. The shopping centre, on Inanda Road, was situated in an upper-high-growth residential area, next to...
Updated 1 hour 33 minutes ago South Africa recorded a trade deficit of R2.51-billion ($207-million) in April from a revised shortfall of R9-million in March, data from the revenue agency showed on Friday. Exports fell by 7.5% to R84-billion, while imports were down 4.8% to R86.5-billion on a...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
The African Development Bank (AfDB) has been an implementing agency for the Global Environment Facility (GEF) since 2008. The relatively young portfolio has 28 projects over 30 countries on the continent according to the 2014 AfDB and GEF annual report released...
PAUL SPEAR Training and development should be an integral and proportionate part of the long-term strategy of all companies, regardless of their size
Investment in South African youth through apprenticeships and learnerships will not only create direct benefits for businesses but will also contribute significantly to job creation and socioeconomic transformation in the country.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96