SAA ‘could have made a huge profit’
The now bankrupt South African Airways (SAA) could have been turning a profit by 2018 if only the state carrier’s “long-term turnaround strategy” had been properly implemented.
So said former acting chief executive Nico Bezuidenhout yesterday in the High Court in Pretoria, where he was the first witness to take the stand in Dudu Myeni’s delinquent director case.
Myeni served as the chair of SAA’s board from 2012 until 2017, during which time the company is said to have suffered losses totalling almost R17 billion.
The Organisation Undoing Tax Abuse (Outa) and the SAA Pilots Association (Saapa) have taken Myeni to court in order to have her declared a delinquent director.
In court, their lawyers have described Myeni’s time at the helm of the board as having been “marked by decay and financial ruin”.
If the court finds against her, Myeni will be barred from sitting on any boards for at least seven years. Outa and Saapa have, however, indicated that they will be asking the court to institute a lifelong ban in Myeni’s case.
Bezuidenhout, who worked at SAA during Myeni’s tenure, yesterday laid out for the court the long-term turnaround strategy that the airline had in 2013 come up with, together with the various plans that formed part of it.
Advocate Carol Steinberg, who is representing Outa and Saapa, yesterday asked Bezuidenhout: “Is it your informed, professional opinion that had these plans been followed, SAA could have in fact been profitable by 2018?”
And he was adamant in his reply. “One-hundred percent,” he said. “SAA’s improved financial results, during the time that we implemented steadfastly the directions as contained in these plans, is evidence”.
Part of the long-term turnaround strategy in question included an imperative that SAA increase its networks through “code-share” relationships.
And one of the allegations levelled against Myeni is that she interfered in one of these codeshare relationships and in the process ended up scuppering what would have been a highly lucrative deal with Emirates and seen SAA enjoy an annual revenue guarantee of $100 million (about R1.5 billion).
SAA was late last year placed in business rescue.
Public Enterprises Minister Pravin Gordhan made the announcement that this was a decision taken by the board – a short time after a letter from President Cyril Ramaphosa to Cabinet – in which he said SAA must enter voluntary business rescue – was leaked.
This week the state-owned Development Bank of Southern Africa announced a R3.5 billion bailout for SAA.