SAA starts talking tough with fleet suppliers

22 April 2013 - 02:06 By MONGADI MAFATA
subscribe Support independent journalism. Subscribe to our digital news package for R80 p/m.
Subscribe now

Tired of being given the short end of the stick by its service providers, SA Airways took steps on Friday to banish its soft-target image by talking tough to aircraft manufacturers Airbus and Boeing.

Soon after Monwabisi Kalawe was unveiled as the new captain to steer the national carrier, acting CEO Nico Bezuidenhout fired a salvo at Airbus and Boeing, telling them to sharpen their pencils as they recorded SAA's re-fleeting specifications.

"SAA's re-fleeting process was stalled last June. Now that the long-term strategy has been finalised, we'll be taking our new fleet plan to Airbus and Boeing by May and they had better sharpen their pencils," he said.

Kalawe is the sixth CEO of SAA in less than 10 years. He will oversee the carrier's newly crafted strategy, which Public Enterprises Minister Malusi Gigaba will present to the cabinet next month.

Some of the elements of the 20-year turnaround strategy, including 500 submissions from staff, have started yielding results.

"We've had a cost-compression programme in place over the last 12 months, and we've realised savings of R700-million to R800-million in the year. Now we're looking at underlying aspects of how to sustainably improve this business," Bezuidenhout said.

"It's not about saving on milk and tea bags; it's about how do we do things differently."

Part of the strategy has led to the airline re-looking at how it uses its fuel-hungry fleet and its staff, and adopting a tougher line with its suppliers. SAA has a history of going cap in hand to the government for bailouts to keep the flag in the sky.

Last year it reported a R1.25-billion loss as a result of high fuel and other operational costs.

It also went through a turbulent year after some board members resigned because of disagreements with the Department of Public Enterprises on the strategic vision of the airline and delays in the release of a R5-billion bailout guarantee.

"The board worked tirelessly to find a leader who will stabilise the internal environment while working towards ensuring good corporate governance," said Dudu Myeni, acting chairman of SAA.

"Kalawe will lead SAA in contributing to the socioeconomic development of the country and the continent."

Kalawe was the MD and most recently chairman, of national catering company Compass Group.

subscribe Support independent journalism. Subscribe to our digital news package for R80 p/m.
Subscribe now