Turbulence as SAA board chair Magwaza tenders his resignation

SAA board chair Magwaza Source: Google Images

Embattled national carrier South African Airways (SAA) was yesterday thrown into further turmoil with the resignation of board chairperson Johannes Magwaza.

His resignation came hardly two months after the cash-strapped airline’s erstwhile chief executive Vuyani Jarana threw in the towel in a scathing letter to the Magwaza led board.

Minister of Public Enterprises Pravin Gordhan stunned legislators when in his budget vote speech he said Magwaza had resigned from the airline for personal reasons, without elaborating further.

“We would like to thank the outgoing chairperson of the SAA Board, Mr JB Magwaza. Your contribution is appreciated,” Gordhan said.

Magwaza leaves the role hardly two years after his appointment by then-finance minister Malusi Gigaba in 2017, after the exit of controversial former chairperson Dudu Myeni.

The South African Cabin Crew Association and the National Union of Metalworkers of South Africa, which have been demanding that Jarana be reinstated, have also demanded that Thandeka Mgoduso, Martin Kingson, Peter Tshisevhe and Geoff Rothschild be removed from the SAA board. Magwaza’s resignation was announced just hours after Gordhan said the boards of state-owned entities (SOEs) needed specialised and specific industry expertise to ensure they turn the corner.

Gordhan insisted that boards of the ailing SOEs must be increasingly accountable for the financial and operational performance and repositioning of the companies. “In giving effect to its renewed efforts to turn around the SOEs, DPE will over the next 6 to 8 months work with the boards of the SOEs to develop new operating models for their businesses, and develop a financial sustainability plan.”

The untimely resignation means SAA is without two key people in the midst of trying to stay afloat in the face of a cash crunch.

Jarana lashed out at the lack of government support in stabilising the entity and complained that lack of commitment to fund the national carrier was systematically undermining the airline’s turnaround strategy and making it near impossible to break-even by 2021.

The state-owned airline last month said it would need an additional R4 billion in immediate liquidity to survive the current financial year.The airline’s most recent bailout of R5bn was last October, but the lion’s share of the cash injection went to service its debt.The company’s total outstanding debt stands at nearly R22bn.