Public Enterprises Minister Malusi Gigaba confirmed on Tuesday that he had formally received a long-term turnaround strategy from the board of embattled national carrier South African Airways (SAA), which had committed to deliver the plan before the end of March.

In a statement Gigaba indicated that the strategy was designed to address operational and financial challenges faced by SAA, which had reported cumulative losses of around R14-billion over the past few years and which, over a ten-year period, had also received cumulative shareholder support of more than R15-billion.

The plan was handed over by acting chairperson Dudu Myeni, in line with a directive issued on October 15, 2012, during the airline’s annual general meeting.

The board’s mandate was to develop a turnaround plan that would place the airline on a financially viable footing in the context of rising fuel prices and a constrained balance sheet.

Details were not immediately available, but Engineering News Online has learned that the initial focus would be on extracting efficiencies ahead of any request for the further recapitalisation of the airline.

Should it be implemented, the plan would involve a review of SAA’s current route plan and could also involve a “right-sizing” of the airline and its subsidiaries.

The restructuring would, therefore, not be confined to airline operations with SAA’s other divisions, such as Air Chefs and SAA Technical, also coming under scrutiny.

In addition, the plan would seek to extract synergies in the relationship with South Africa’s other State-owned airlines, SA Express and Mango.

SAA's future approach to issues such as procurement, as well as its fleet configuration had also been integrated into the strategy.

"This is the first, all-encompassing strategy for the airline and a defining moment in SAA’s 79 years of existence. The strategy will be followed by a comprehensive implementation plan aimed at ensuring successful delivery of its objectives, once reviewed by the Department of Public Enterprises,” Myeni said.

Gigaba indicated the shareholder and various stakeholders would now review the strategy and that, once it was approved, it would be “implemented as a matter of urgency”.

In fact, the Minister emphasised the implementation phase, which he said would required staff, management and the board to be “hands on” so as to avoid a repeat of previous failures to implement turnaround plans.

SAA indicated that there would be a three-phase implementation approach, focusing on short-, medium- and long-term outcomes, with continuous and cyclical monitoring and review over a 20-year period.

But Myeni stressed that the impact would be felt from year one of implementation.

"One of the key elements of the strategy is increased focus and emphasis on governance and accountability. These will go a long way in restoring SAA's reputation in the global markets and among its stakeholders," she added.

The details of the strategy would be shared, SAA said, once the Department of Public Enterprises had digested its contents and endorsement had been received from the National Treasury.