Chief of SAA in for torrid first day
Carrier seeking R13bn loan
VUYANI Jarana will be met with a baptism of fire on his first day as chief executive of beleaguered SAA.
The cash-strapped national carrier is expected to ask legislators today for a capital injection of R13 billion over a period of three years.
And this as the National Union of Metalworkers of South Africa and the SA Cabin Crew Association march to the SAA offices to demand pay increases.
Yesterday’s appointment of Vodacom’s senior executive, Jarana, marks an end to a twoyear search for a permanent chief executive for the national carrier.
Jarana leaves his five-year stint as the chief officer of Vodacom Business, to become the eighth person since 2010 – either a permanent or interim basis – tasked with turning around the fortunes of SAA.
Jarana replaces the company’s chief technical officer, Musa Zwane, who was acting in the position since 2015.
The 41-year-old Jarana takes the helm of SAA with a big reputation in the corporate world, but it remains to be seen if he will be able to navigate the perilous political landscape associated with state-owned enterprises.
Together with Vodacom’s chief executive Shameel Joosub, he was one of the only two Vodacom executives to be awarded a long-term incentive bonus in the year ended March, taking his total pay in the period to R10.7 million.
Finance Minister Malusi Gigaba yesterday welcomed the appointment of Jarana, saying at Vodacom he had demonstrated that he could build a solid and transformed organisation with emphases on both top line business growth as well as margin expansion.
“Given that Mr Jarana has turned around a loss-making subsidiary of the Vodacom Group, Vodacom Business Africa, into a profitable and growth business, we believe he will be key in turning around SAA,” Gigaba said. SAA confirmed in its preliminary results presented to legislators last year that it was in deep financial crisis.
The appointment of a new chief executive for SAA was not totally unexpected, as Gigaba last month said as he unveiled his 14-point plan to revive South Africa’s ailing economy said they would finalise the appointment of a new head at SAA at the next cabinet meeting. The meeting was held this week.
Ian Cruickshanks, the chief economist at the SA Institute of Race Relations, said the appointment of Jarana was a small step in the right direction, but his success at turning around the financial performance of SAA would be determined by whether he was given room to lead the company as he saw fit.
“I hope he gets government support and there is the independence of management in SAA to implement its turnaround strategy, and that a fit and proper board chairperson is appointed to support Jarana,” Cruickshanks said.
The embattled national carrier has about R8bn in loans, and its chief financial officer Phumeza Nhantsi told Parliament in June that the group was diversifying its debt portfolio and had approached the Public Investment Corporation.
The state-owned company last month received R2.2bn from the Treasury for repaying its loan to Standard Chartered Bank.
It also received a R5bn going concern guarantee in September last year after a new board was appointed.
The appointment of Jarana also marks a chance for SAA to start on a clean slate in implanting its turnaround strategy after Gigaba last month announced that the national carrier’s embattled chairperson Dudu Myeni would not serve another term when her current term ends at the end of this month.
She is currently facing legal action from Organisation Undoing Tax Abuse and the SAA Pilots’ Association, who have asked the high court in Pretoria to declare her a delinquent director, which would bar her from serving as a director, a senior executive or on any boards for at least seven years.