Mzimela prepares to wield axe at SAA: report


South African Airways (SAA) CEO Siza Mzimela has begun to exercise her control over the airline with a shake-up of senior management that could see some executives lose their place on the powerful executive committee, a frontpage report in a business daily avers today.

Mzimela has expressed unhappiness with the formation of the executive committee of the airline and has taken steps to put a new structure in place, Business Day reports. “It is believed that Ms Mzimela is likely to reduce the size of the committee, with fewer managers reporting to her,” the paper says.

The changes come amid speculation that action — ranging from criminal charges to sanctions for corporate governance violations — may soon be taken against senior managers named in a forensic audit.

SAA spokesman Fani Zulu said yesterday the shake-up was not related to the KPMG report into possible mismanagement under the stewardship of former CEO Khaya Ngqula and would have no bearing on the changes. “The changes to the executive committee are not about individuals but rather around the structure of the committee.” He said that at this stage there would be no retrenchments or redundancies, but there were likely to be new reporting lines for some of the managers.
“Some executive management functions will be consolidated and related functions will be aligned, and in this way remove duplications. This consolidation and alignment is not prompted by the KPMG investigation (that is, there is no link between this review and the KPMG investigation) but is driven by the desire to streamline and strengthen the airline’s ability to respond to the current challenges and ensure better delivery,” he said.
“Consultations are under way to accommodate suitable alternatives for individuals affected by the consolidation and alignment,” said Zulu. “As regards the KPMG report, we will hold a press briefing on the outcome of the report in the next few weeks.”

In April, SAA said the airline’s board had instructed its legal team at Edward Nathan Sonnenbergs to draft the charges against several individuals named in a forensic report into alleged mismanagement under Ngqula. It said at the time that several executives faced charges ranging from criminal counts to minor governance transgressions.

Despite many problems, Mzimela has inherited an airline in far better shape than it was three or four years ago, Business Day noted.In the 12 months to March last year, SAA reported a net profit of R398 million — reversing the R1.09 billion loss of a year earlier. SAA is expected to post a profit again this year.
“Ironically, while … Ngqula’s top team has been accused of mismanagement, the former CE played a vital role in righting the ship. The restructuring he undertook shaved R2.5 billion off costs, R200 million above target, while his Africa strategy still pays dividends.