SAA has made ‘significant achievements’ in last three months‚ says Nene

16 April 2015 - 16:36 By Linda Ensor

South African Airways (SAA) has made "significant achievements" in the last three months‚ Finance Minister Nhlanhla Nene said in a statement on Thursday. Nene has extended the term of office for the interim board for another six months so that it can continue with its business. This will allow the Treasury to get Cabinet’s approval for a permanent board.The Treasury took control of the troubled airline in October last year to put it back on a path to financial sustainability.The board‚ which had been reconstituted by Public Enterprises Minister Lynne Brown‚ was instructed to ensure that immediate steps were taken to curtail losses‚ improve the company’s liquidity position‚ strengthen governance‚ finalise the annual financial statements and refine the 2013 long-term turnaround strategy."The interim board put in place a 90-day action plan aimed at stabilising the financial position of SAA‚ strengthening governance and fast-tracking implementation of critical aspects of the long-term turnaround strategy‚" Nene said.Treasury officials‚ SAA executives and representatives of the Presidency met weekly to ensure implementation of the plan."Significant achievements have been made during the … period‚ which concluded on March 24 2015. Savings will begin to be realised during the 2015-16 financial year‚ which are expected to result in improvements in the financial performance of the airline going forward."The airline has ceased direct operations on the loss-making routes to Beijing and Mumbai.It has opened a new route to Abu Dhabi that will enable continued connectivity to China and India and many other destinations within Asia.SAA has also renegotiated contracts with suppliers‚ which will result in significant savings in operational costs for the airline. SAA has been able to reduce the costs of the leases on several aircraft on the fleet‚ he said.Nene added that SAA was well advanced in securing financing‚ with maturities of up to seven years‚ which would result in greater stability in the company’s finances. Steps had also been taken to improve governance‚ including a review of the memorandum of incorporation."While being encouraged by the achievements that SAA has already been able to achieve over the 90-day period‚ government also recognises that diligent execution of a sound strategic plan will be required over several years to ensure that the airline is able to operate profitably and its financial position continues to improve‚" the minister said.The Treasury has appointed Deloitte to advise the government on opportunities to strengthen the airline’s long-term strategic plans and the airline’s corporate plan should be finalised by the end of April."Government will continue to work closely with the board and executive management of the airline to ensure that the turnaround of the airline continues‚" Nene said. - RDM News Wire, BDlive..

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