South African Airways (SAA) acting CEO Nico Bezuidenhout has reported that the company’s “90 Day Action Plan is proceeding to schedule”. The plan, announced last month, is intended to enable the full implementation of the air- line’s already approved long-term turnaround strategy.

Already concluded are the re-evaluation of the company’s fleet requirements and the review of its long-haul international routes. “Network optimisation is key and we expect to make more announcements regarding commercial efficiencies in the near future,” he said. (Last month SAA unveiled stronger commercial ties with Etihad Airways, including expanding their codesharing network and increased frequencies to important destinations in Africa. The South African operator also announced a new Johannesburg-Abu Dhabi route; Abu Dhabi is the home base of Etihad.)

“There has also been a significant drive towards better governance, with strengthened interaction between the board and management an emphasis,” he added. “There has also been resolution [sic], in agreement with the National Treasury, in terms of scheduling the postponed Annual General Meeting for late January, early February.”

The Action Plan is being driven by a “War Cabinet” of executives within SAA. This meets twice a week. Progress is also being closely observed by the newly constituted SAA board. “The interventions managed by the ‘War Cabinet’ are directly linked to business deliverables to steer the company back on to a path of sustainability as outlined in the long-term turnaround strategy,” explained Bezuidenhout. “SAA is serious about rebuilding commercial sustainability and we will achieve our objectives. SAA means business.”

The Action Plan has six main thrusts. The first of these is to immediately deal with SAA’s liquidity situation and solvency. To these ends, the airline identified R1.3-billion in possible savings.

The second thrust is to immediately investigate and determine what the options are for the future funding of the airline. The government is now more open to the strategic equity partnerships for the airline. However, SAA is now effectively a group, composed of SAA itself, SAA Technical, low-cost carrier Mango and airline caterer Air Chefs. Each, it has been pointed out, has different needs when it came to possible strategic equity partners.

The third thrust is to deal with governance defects. The airline’s commercial rivals had proven to be more nimble in dealing with the changing environment of the air transport industry. An Inter-Departmental Task Team, comprising representatives of the Department of Public Enterprises, the National Treasury and SAA, has been set to accelerate higher-level decision-making processes regarding (not within) SAA.

The fourth thrust is concerned with legal and high-level governance. This will involve an immediate review of all the company’s contractual burdens and any defects in its legal structure. The fifth thrust is to reorganise and optimise the company’s assets. A holding company structure is being created and the subsidiary companies are going to become sister companies to SAA. (Mango has always been run separately from SAA, has always had a different culture to SAA and is usually profitable.) The sixth thrust is to improve communication, both internally, with the government, media and people. He promised the media updates on the implementation of the Action Plan.