Thomas Kgokolo, newly appointed interim CEO of South African Airways (SAA), says he accepted the job as it is an opportunity to use his experience and skills to rebuild a sustainable airline that all South Africans can be proud of.
SAA has been in business rescue since December 2019 and the rescue practitioners are finalising the process so that the airline can be handed back to the interim board.
Kgokolo has aviation industry experience, having worked as the interim CEO of Air Traffic Navigation Services (ATNS). The interim SAA board says it appointed him in the interim capacity, because he has experience in running a company, especially during a transition period.
Kgokolo says the approach is, therefore, to stabilise SAA during this transition, so that when a strategic equity partner (SEP) is on board, the entity is on a sound footing.
"The timeous conclusion of an SEP will have a bearing on the ability of the airline to be sustainable in the long term," he says.
"SAA agrees that the industry is indeed not in a good state; however, the long-term sustainability of the airline will be enhanced with the presence of a strategic partner. We are optimistic that this period presents opportunities to those who have a long-term view and realise the potential that SAA provides."
He regards SAA's biggest current challenge to the impact of the coronavirus pandemic on the aviation industry.
"The closing of borders continues to have a negative impact on the revenue and cash flow of the business. This situation is also making it difficult to plan for a sustainable restart," he explains. Furthermore, he regards the timeous resolution of the deadlock with the SAA Pilots' Association (SAAPA) as key to enable proper planning.
"SAA's main interest is for this issue to be resolved speedily as it will negatively impact the conclusion of the business rescue process and the planning for the restart. Naturally, SAA pilots should be representative in line with experience and the demographics of the country," he said.
Public Enterprises Minister Pravin Gordhan has told Parliament in the past that cargo could be a good focus for SAA as a starting point. Kgokolo agrees that cargo does indeed provide an opportunity for growth for the airline.
"The approach will be to plan strategically and build on the relationships the cargo division has made over the years of operating, especially with a number of active partners. The intention is not to start a cargo operation only. However, it does provide an opportunity for a restart, building on the experience the airline has in this space," said Kgokolo.
During the rescue process, the BRPs returned planes leased by SAA to lessors in order to save costs. The airline is left only with a few older planes it owns. Kgokolo says negotiations are underway to ensure that SAA has an appropriate fleet for the airline's restart, at affordable cost. He foresees that, in the long term, the role of the SEP will be key in the final fleet configuration.
The DPE is hoping for Parliament to make a special appropriation of R2.7 billion for SAA's embattled subsidiaries SAA Technical, Mango and AirChefs from the R10.5 billion allocated in last year's mini-budget to implement SAA's business rescue plan.
Kgokolo acknowledges that SAA's subsidiaries are not in a financially good state, for as long as the R2.7 billion is not released to them, to enable their restructuring.
"The board has been looking at various options it has at its disposal whilst this process is not concluded," he explains.
All in all, Kgokolo believes a flag carrier like SAA is a tool for nation building and national identity.
"More importantly, it is a good instrument for promoting both economic and social development, especially in relation to the tourism industry, since one will have to look at the value chain when accessing the success of the national airline carrier. This is in line with many countries around the world," he states.
"My immediate action, as interim CEO, is to rebuild trust and identity to the remaining SAA employees who have gone through a difficult period. Since we are a customer-facing entity, it is key to ensure that we have motivated staff."
At the same time, for him the next parallel action is to engage with all SAA's external stakeholders as the airline is being prepared for a restart. This includes ensuring all the necessary compliance.