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Finance Minister receives SAA's CEO submission

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South African Airways - [http://planespotter.ipcoweb.com/user_images/South_African_Airways_Airbus_A320_ZS-SZZ.jpg] South African Airways - [http://planespotter.ipcoweb.com/user_images/South_African_Airways_Airbus_A320_ZS-SZZ.jpg]

Finance Minister Malusi Gigaba has received the South African Airways (SAA) submission on who should be its next Chief Executive Officer.

“Having followed due process the SAA board has made a submission to me and stated their preferred candidate,” Minister Gigaba said on Thursday.

This as the Minister briefed media on details of the inclusive economic growth action plan at the Johannesburg Stock Exchange (JSE).

Announcing details of the action plan which includes several interventions and timelines, which is set to inspire confidence in the country, the Minister said he had applied his mind on the submission made by the boards.

Among the interventions of the plan is the recapitalisation of the state owned entities (SOEs) and government guarantees which includes the finalisation of the recapitalisation of the national carrier, as well as the South African Post Office.

Responding to a question, Minister Gigaba said he has applied his mind to the matter and has prepared and submitted a Cabinet memo.

“The next Cabinet meeting should finalise the matter and we will announce the name. It’s important that this should happen, in order to assure SAA lenders that government is serious and that we take serious the loans they have given us,” said the Minister.

Last week, it was announced that National Treasury had decided to transfer funds from the National Revenue Fund (NRF) to the carrier to allow the airline to pay back its debt to Standard Chartered Bank thereby avoiding a default.

The Treasury said a default by the airline would have triggered a call on the guarantee, leading to an outflow from the NRF and possibly resulting in elevated perceptions of risk related to the rest of SAA's guaranteed debt.

At Thursday’s briefing, Minister Gigaba said government will not be reckless with the loans the airline receives.

He said that it is now time for the carrier to have an experienced Chief Executive Officer (CEO).

Two years ago the suspended SAA CEO Monwabisi Kalawe resigned with immediate effect.

“[We have the] responsibility to turn the airline around by appointing someone with good business grounding, good business acumen, someone with turnaround expertise who is going to help us achieve what SAA has failed to achieve over the last period of about a decade. So much has happened at SAA, so many CEOs have come and gone, none of them have stayed long enough to achieve what is possible,” said the Minister.

The Minister added that over the years a lot of money has been invested into the airline -- which was moved from the portfolio of the Department of Public Enterprises to National Treasury in 2014 -- in the form of guarantees and bailouts.

“A point must be reached where we no longer continue to give our public resources to the airline just to finance inefficiency because that erodes public confidence in the airline and the rationality of the decisions of government. We need to appoint a CEO with experience in managing companies of this size,” said the Minister.

Minister Gigaba said all South Africans believe they should have an airline.


 

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SAnews.gov.za

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