SAA com­mer­cial head sus­pended over ‘sub­stan­tial losses’

Weekend Argus (Saturday Edition) - - NEWS -

SOUTH African Air­ways has sus­pended its chief com­mer­cial of­fi­cer, Syl­vain Bosc, af­ter a tip- off of pos­si­ble wrong do­ing, the air­line said yes­ter­day.

SAA said a foren­sic in­ves­ti­ga­tion by le­gal firm Ed­ward Nathan Son­nen­bergs into al­le­ga­tions that were re­ceived through the Deloittes tip-off hot­line “con­firmed that there is sub­stance” to one of the ac­cu­sa­tions.

The al­le­ga­tion sug­gested: “Syl­vain doc­tored the num­bers for Abu Dhabi to favour the open­ing of this route and sold SAA out.

He know­ingly mis­rep­re­sented the board by over­es­ti­mat­ing the fig­ures with­out sub­stan­ti­a­tion and ig­nored net­work spe­cial­ist ad­vice.”

SAA said the foren­sic in­ves­ti­ga­tion “con­firmed that Mr Bosc had ap­proved a busi­ness case, which he had in­put into and was ap­proved by him that was pre­sented to the SAA board of di­rec­tors for ap­proval to open a route be­tween Jo­han­nes­burg and Abu Dhabi”.

This new route would then be used as a gate­way for SAA pas­sen­gers into China and In­dia and would op­er­ate at a sub­stan­tial profit as the cur­rent routes to those des­ti­na­tions were caus­ing losses to SAA in ex­cess of R400 mil­lion per an­num.

SAA has had a code share agree­ment with Eti­had Air­lines, which be­gan in the 2013/2014 fi­nan­cial year and is still in op­er­a­tion.

The agree­ment in­di­cated the pas­sen­ger fares gen­er­ated from this route were sub­stan­tially lower than es­ti­mates put for­ward to the board and the min­is­ter by Bosc.

“A former SAA in­ter­na­tional net­work plan­ner pre­vi­ously warned Mr Bosc that the ex­ag­ger­ated fare price that Mr Bosc had used in the cal­cu­la­tion would not be achieved and that this would cause fur­ther losses,” the air­line said.

“Mr Bosc elected to ig­nore that ad­vice, which sub­se­quently was proven to be cor­rect and the se­lec­tion of the Abu Dhabi Net­work re­sulted in sub­stan­tial con­tin­u­ous losses.”

SAA said the sub­mis­sion to the board by Bosc amounted to an over­es­ti­ma­tion of the pro- jected rev­enue fig­ures and ig­nored net­work spe­cial­ist ad­vice who had ad­vised the Abu Dhabi route would run at a sub­stan­tial loss.

“Based on the non-dis­clo­sure of these risks to the board of di­rec­tors of SAA and sub­se­quently to the min­is­ter of fi­nance in the Sec­tion 54 ap­pli­ca­tion, a busi­ness case that was sub­stan­tially flawed and caused losses to SAA was ap­proved.”– ANA

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