Execute the plan!

27th February 2015

By: Terence Creamer

Creamer Media Editor

  

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The quote attributed to General George Patton, “A good plan, violently executed now, is better than a perfect plan next week”, came to mind during a recent media interaction with acting South African Airways (SAA) CEO Nico Bezuidenhout. Admittedly, so did Yogi Berra’s oft-repeated remark: “It’s déjà vu all over again!”

The reason is that, besides the fall in the fuel price, which has arguably lessened the urgency for a major adjustment to the national carrier’s gas-guzzling fleet, it appears that just about all the other components of the 2013 Long-Term Turnaround Strategy remain intact.

However, two years down the line, SAA is only now beginning to actually implement the plan, which is currently being “revalidated” and updated.

Bezuidenhout himself admits that it “does indeed feel like déjà vu”, quipping that, while his young daughter has learned to walk and talk during the period, far too little has changed at the State-owned company.

There are some promising signs, however.

The most important development is that SAA has, at last, moved to terminate two so-called ‘strategic routes’ that have been haemor- rhaging cash for years: Beijing and Mumbai.

The move will save the airline around R600-million a year and has been done in such a way as to sustained connectivity between the two markets. Beijing will be serviced through an arrangement with Air China, while SAA’s evolving relationship with Etihad Airways, together with an opening of direct flights to the Middle East from March 29, will provide a more indirect, but less financially debilitating, link into the key Indian market.

While anecdotal, the speed at which SAA’s new shareholder, the National Treasury, authorised the culling of the Beijing route is arguably also heartening, particularly when juxtaposed against the excruciating lead times associated with past decisions. Bezuidenhout says SAA put in a request for permission to cut the Beijing route late one Friday afternoon. “By Monday morning, when I got back to the office, the approval had been granted.”

Whether the bailout-wary National Treasury will be as quick off the mark with the other key components of the plan – ranging from allowing Mango to take a larger domestic-market position as SAA focuses increasingly on African markets, through to corporate restructuring, which could result on job losses – remains to be seen. But it is a promising start nonetheless.

The focus on implementation and the shortening of lead times is also a model that could and should be replicated across other State-owned companies, particularly where turnaround progress is being hampered by shareholder indecision.

South Africa is arguably now at a point where the implementation of policies and plans, no matter how imperfect, is not only critical for SAA, but also for a range of other government departments and State-owned companies. Any further stalling will worsen the delivery problems, undermine future growth prospects and make it impossible to raise the revenues needed to accelerate the campaigns against unemployment and poverty.

Edited by Terence Creamer
Creamer Media Editor

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