New mindset at SAA will lead to a profit being turned in future, says CEO

22nd June 2022 By: Donna Slater - Creamer Media Contributing Editor and Photographer

The mindset of South African Airways (SAA) has changed with its restructuring and the airline will turn a profit at some point, states SAA CEO John Lamola.

In an interview with CNN international business correspondent Richard Quest on the Quest Means Business show on June 20, Lamola said SAA was emerging from a scenario not uncommon to other international and State-owned airlines.

Questioned about why SAA has been struggling to make a profit and wean off its dependence and reliance on government bailouts, he averred that, during the Covid-19 period, governments around the world provided as much as $200-billion to help airlines perform their strategic roles of creating connectivity and travel among people, as well as facilitating trade.

When asked about whether SAA has restructured sufficiently enough to turn a profit, Lamola said, “absolutely.”

He stated that, as a result of emerging from the Covid-19 pandemic and a restructuring process, SAA was emerging as “a new, totally different operation”. Lamola added that, as a redeveloped entity, SAA will, for the first time, be run primarily by a private entity.

However, when Quest said SAA had received more bailouts than most airlines, Lamola said the “jury is still out on that [matter].”

In terms of changing its mindset towards relying less on government for financial help, he said the South African government, as the main shareholder in the past, had as any other shareholder would when an investment is in trouble, stepped in to help.

To this, Quest stated that the South African government had “interferred” on many occasions in the running of the airline, based on political policies.

Lamola responded that the situation in South African was unique, because SAA had always been a strategic asset. “In Africa, where South Africa has a very special role as the leading aviation industry on the continent . . . the government has done what it has, but the mentality has changed.”

He said the new SAA would be different as it would be majority-owned by a nongovernment entity.

Secondly, Lamola said SAA would be an “agile, stripped out airline” with a focussed strategy of “unlocking the African market”.

“Currently, Africa accounts for less than 2% of the global air travel industry. [There is] a lot of potential there. It has the youngest population in the world and growing gross domestic product output. SAA is poised to exploit that market,” he said.