How Vuyani Jarana lost a R100K bet that he wouldn’t last at SAA

Former South African Airways CEO Vuyani Jarana must still cough up for the R100,000 bet he made with Free Market Foundation executive director Leon Louw that he would have SAA profitable by 2021.

Not that he was going to collect it personally, Louw told The Citizen yesterday. It was always going to go to a charity, hopefully for land titling for black South Africans.

But was making the bet with Jarana a sign of Louw’s belief Jarana’s resignation was inevitable?

“I thought so. He’s not the sort of person who would sit and endure the sort of restraints which are placed on the executives of SAA, and direct interference by the minister which in my view is probably illegal,” Louw said.

“Ministers in South Africa think they can as shareholders directly interfere with companies, hire and fire executives and so on, which is a violation of the company law and a violation of the statutes. State-owned enterprises are meant to be autonomous.”

Louw accused Public Enterprises Minister Pravin Gordhan and others of behaving in an “extraordinarily dictatorial way”, which “Jarana would never have put up with”.

Gordhan has maintained his silence.

“The most important thing was that SAA could not be rescued, so he was wasting his time there,” Louw said.

Jarana leaves a board still in flux. Its chief financial, information, and commercial officers are still in acting positions, as are the CEOs of Mango, SAA Technical, and SAA Cargo.

This was according to SAA’s corporate site, and SAA’s spokesperson seemingly had a busy day, unable to respond to messages for clarification. such as the whereabouts of SAA’s 2018/19 audited financials.

So, it’s to a presentation made to the parliamentary committee on public enterprises made by Jarana in November last year.

There, he reported a net loss of R5.7 billion for 2017/18 while the 2013 long-term turnaround strategy stumbled due to implementation failure.

He predicted the SAA group would lose another R5.2 billion in 2018/19 and another R1.9 billion this financial year.

Captain Grant Back of the South African Airline Pilots’ Association noted in a statement this week that when Rome was burning, one needed the best firefighters available.

“We are deeply troubled at reports that the CEO’s turnaround plan was sabotaged internally and externally,” Back said.

“In the end, the CEO was hobbled by inflexible and restrictive government policy as well as the board and shareholder taking active roles in executive decision making. This was exacerbated by the SAA executive structure and an executive management team that had remained mostly unchanged since the Dudu Myeni era.”

Back said Jarana’s resignation should be an opportunity for government to learn from its mistakes.

“Given the tight margins that airlines operate in, SAA needs a new CEO with an unrivalled understanding of the industry. It is imperative that the SAA board moves forward with the appointment of a fearless, non-political, independent CEO with a strong track record in the aviation sector,” said Back.

“The last thing we need is a political appointee with no airline experience.”

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