Gordhan tells SAA to map clear targets to profitability
The finance minister addressed Parliament where he explained the short term goals of the airline.
JOHANNESBURG - Finance Minister Pravin Gordhan says the South African Airways (SAA) board must now set a clear target for when the airline will become profitable again.
Yesterday, Gordhan addressed Parliament where he explained the short term goals of the airline include employing a new CEO and financial officer as well as consolidating the national carrier's financial statements for the past two years.
The finance minister also says the board needs to become financially stable.
"The board must take responsibility for setting a very clear target date for returning their airline to profitability. Ultimately, what all of us want is an accountable board, an accountable airline and one that's able to return itself to profitability."
SAA recently appointed a new board and reinstated its chairperson Dudu Myeni, who has been blamed by opposition parties for the national carrier's current financial woes.
Gordhan said some of the short-term objectives that need to be achieved by the SAA board include the consolidation of financial statements.
"Once the CEO is in place, he or she has to assess what kind of a team is there and take responsibility for compiling and putting in place a competent management team that will ensure that the turnaround strategy is effectively implemented."
Gordhan also said the board must ensure cost containment, so that the airline's debt is paid off.
"We've created half the board to consider creating and it seems they have agreed. A financial subcommittee under the chairpersonship of the deputy chairperson who is a qualified charted accountant and a CFO in a big listed company."
The carrier has been given a deadline by Hong Kong authorities to submit their financial documents by the end of this month or face deregistration, after failing to publish its annual statements for the past two years.
Gordhan also said non-executives should not interfere in the day to day operations of the airline.
"This finance committee and the board, as I've said, will to ensure that they understand fully what are the current loans that SAA has from the private sector and reassure the people who are offering the loans, who will from time to time get nervous about the fact that SAA may not be run well."
Gordhan said there also needs to be a review of the current suspensions in place.
"We've also asked the board to review all the suspensions that are currently in place to see whether they are justified in terms of the law or have happened on an unjustifiable way."