Outa: SAA needs external help to survive

The Organisation Undoing Tax Abuse (Outa) maintains that South African Airways (SAA) cannot continue as a fully government-owned entity.

FILE: An SAA aircraft. Picture: AFP

JOHANNESBURG – The Organisation Undoing Tax Abuse (Outa) maintains that South African Airways (SAA) cannot continue as a fully government-owned entity.

This comes after the airline's board confirmed the resignation of CEO Vuyani Jarana at the weekend.

Jarana cited various reasons for his departure, including uncertainty about funding and lack of support for the ailing carrier's turnaround strategy.

His resignation comes just a few days after Eskom CEO Phakamani Hadebe also ended his term at the parastatal.

The two SOEs have a combined debt bill of close to R500 billion.

Outa's Heinrich Volmink said that SAA needed external help in order to regain financial stability.

“It’s a situation that requires, I’d argue, external help. In order for it to go forward, it would need stakeholders involvement because this is clearly not enough for the board.”

At the same time, Outa called on the government to find more experienced leaders to head the national carrier.

Outa's Wayne Duvenage said the government must stay away from trying to run a company with the aim of making a profit.

“The government should get out of the business of business. In other words, it can never compete with other airlines.

“It’s not going to be successful in the long run, so it needs to find equity partners but, in the meantime, they need to get leadership that’s going to do the hard job and meet with the unions and cut the overheads costs.”

EFF BLAMES GORDHAN

The Economic Freedom Fighters (EFF) said they are concerned about the resignations and the axing of black executives from state-owned entities (SOEs) under the leadership of Public Enterprises Minister Pravin Gordhan.

The EFF has accused Gordhan of pushing axed CEO Siyabonga Gama out of Transnet, undermining Hadebe as Eskom CEO and failing to support Jarana.

"Instead of providing the support that will lead to stability in state-owned companies, Pravin Gordhan is presiding over massive purges of black and particularly African executives in state-owned companies," said the party.

The EFF said Jarana's resignation letter pointed to "the reality that SAA was not given the much-needed support by the Pravin Gordhan-led ministry".

Jarana tendered his resignation on Wednesday, less than a week after Hadebe called it quits at the power utility.

"What is notable is that historically, this is how Pravin Gordhan operates, in that everywhere he leads, African executives become casualties, sometimes in favour of less qualified friends," said the EFF.

(Edited by Leeto M Khoza)