Tricky new air navigation challenge awaits latest SAA chief
SAA has somebody in charge again at last, albeit on an interim basis — a permanent CEO will probably only be appointed once the government brings in a strategic equity partner to relaunch the airline, which could still be some time off.
Thomas Kgokolo, a nonexecutive director of Air Traffic Navigation Services (ATNS) and a former CFO at the Competition Commission, was appointed interim CEO on Tuesday.
According to a letter sent to staff by the airline this week, Kgokolo has 15 years of public sector work experience, is a chartered accountant and holds an MBA from the Gordon Institute of Business Science.
SAA also appointed Fikile Mhlontlo as interim CFO, Mpho Letlape as interim human resources executive and Sakhile Reiling as executive in charge of operations.
The airline has been without a formally appointed CEO since Zuks Ramasia took early retirement in April last year, although Philip Saunders took over the reins until December. Ramasia had been appointed acting CEO in June 2019 after the resignation of Vuyani Jarana.
SAA is still in business rescue, but its business rescue practitioners are expected to wrap up this process soon.
Need for leadership
This week the airline’s interim chair, Geoff Qhena, told Business Times SAA was “transitioning from business rescue while at the same time the process of finding a partner is under way”, and that there was a “need for leadership to oversee that transition”.
He said the process of finding a strategic equity partner was being driven by the department of public enterprises.
“It will therefore not be prudent to make a permanent appointment when that process is not complete,” said Qhena.
Department of public enterprises spokesperson Richard Mantu said on Friday the process of choosing a strategic equity partner was at an “advanced stage” and the department would make an announcement as soon as a decision was made.
Qhena said the board had specifically sought an interim CEO who has experience in running a company during a transition period.
“We also wanted someone who will be able to engage with various stakeholders, which [Kgokolo’s] exposure will allow to happen.
“He has an appreciation of the airline industry, especially with the ATNS exposure,” Qhena said.
“Also, the board has made other appointments to strengthen other parts of the business and one of those key ones is the appointment of Captain Sakhile Reiling as the executive in operations. She has extensive airline experience and this will complement him.”
Linden Birns, MD of aviation consultancy Plane Talking, said the appointment of an interim CEO does “beg the question of what is happening with the introduction of a strategic equity partner”.
“Why haven’t they locked that in first and then appointed permanent people?”
Birns said Kgokolo “has an enormous job on his hands”.
“It’s an unenviable task … Hopefully the appointments will become permanent, because one of the things that has dogged state-owned enterprises over the years, and a lot of government departments, is the appointment of people in acting positions where they are not fully invested to take the tough decisions, and they are not on the same pay grade either.”
Good fit for transition
Aviation economist Joachim Vermooten said Kgokolo was probably a good fit to transition the airline because a lot of corporate financial issues had to be handled.
“I think his role is different from running the airline,” Vermooten said. “In setting up a new airline you need someone who understands scheduled airlines.”
He said a permanent CEO should “be experienced in scheduled airlines rather than just aviation”.
Vermooten said that whoever ultimately runs SAA on a permanent basis will have to be conservative with money and preferably have a strong accounting background.
The new person in charge will have to realise that if the airline starts operating a route, “a vast amount of money is committed, which requires the ability to muster a sales force that can actually fill the aircraft”.
The pandemic and international travel bans have crippled the airline industry around the world, with scores of carriers going out of business.
Vermooten said a new airline cannot “simply apply historical approaches” when launching but should focus on balancing supply with the weaker level of demand.
Chris Zweigenthal, CEO of the Airlines Association of Southern Africa, has welcomed the appointment of Kgokolo and Reiling, saying he wished them well “as they tackle the challenging task” of providing a solid base to get the airline going again.