“Bold and audacious” new approach to saving SAA

Amid the immense challenges facing South African Airways, stakeholders have been called upon to rise above the crisis created by both the weaknesses within SAA and the Covid-19 pandemic.  A long-term vision and strategy to mitigate the impact on employees, tourism, and the aviation industry, and to become a catalyst for economic development and job creation has been agreed upon.

A ‘Leadership Compact’ has been signed that commits to taking a new approach, acknowledging that there will be a major performance-based culture change for all leadership, management and employees, as the transition to a new SAA takes place.

This requires an absolute focus on becoming internationally competitive for safety, quality, and cost. According to a statement issued by the Department of Public Enterprises, “It will not be the old SAA, but the beginning of a new journey to a new restructured airline, which will be a proud flagship for South Africa.”

The agreed intention is to produce an airline which is a catalyst for investment, job creation in key sectors, and economic growth throughout all regions of the country. It is to be “a mirror to the world, reflecting the splendour and beauty of our great nation,” read the statement. “Now, with the Covid-19 storm surging around us and the fog of economic uncertainty descending, a new and bold approach is required if there is to be any chance that South Africa can retain vital airlift capacity and trade connections, through a strategic national asset, with both public and private sector participation, which is internationally competitive, viable, sustainable and profitable.”

The airline will be funded through a variety of options such as strategic equity partners, funders and the sale of non-core assets, and the parties are still of the view that the state must continue to play a role.

Moving forward and looking to the future, Minister Pravin Gordhan has established demanding timelines for the development of the Business Rescue Plan in order to determine what path the old SAA could follow. “The transition to the new airline may require sacrifices, pain and hardships for all concerned, particularly for those employees who may be displaced. The Leadership Forum recognise that they have a responsibility to mitigate these challenges through a range of measures, including but not limited to preferential reemployment, reskilling and enterprise development opportunities.

“Unions and the Department are working together on a business model that deals with what a new national carrier of the future will be, but also crucially how this can be achieved to ensure a competitive edge in safety, quality and costs in the sectors in which SAA competes.

“The creation of a new, dynamic airline, with the correct corporate structure, led by skilled, competent and experienced management and staffed at competitive and benchmarked rates will allow for the new SAA to compete in the post Covid-19 world.

“The shareholders and Union leadership recognise that there are going to be serious challenges to overcome. However, it is essential to build a leadership coalition which is robust and strong enough to find solutions, and establish the foundations of a new airline with a growth path in this uncertain environment, which is in the best interest of our nation and all its citizens,” concluded the statement.