Airline company Comair yesterday announced the appointment of Erik Venter as CEO after Gidon Novick resigned with immediate effect. Venter and Novick had been joint CEOs of the company for the last five and a half years.
Novick resigned to pursue other entrepreneurial business ventures but “will remain available to the company in a consulting role for the foreseeable future,” Comair said in a statement. Novick also resigned as a director of the Comair board.
The JSE-listed airline company, which operates Kulula.com and British Airways in South Africa, said its board took a decision that the team would be best served by a single and focused leadership.
“Erik has had a long and successful career with the company and together with the executive team, is looking forward to the challenges ahead,” the company said.
“Whilst the past few years have been excellent for the group it has been rather unusual to have two CEOs. It was thought necessary to continue forward with one vision and one strategy and for me it was time to move on,” Novick said.
He made it clear that there was “absolutely no bad blood between himself and Venter” and that although “we had lots of fights over the years…I am not leaving because of any fight. It’s simply time to move on. Erik is a great guy and he is surrounded by a great team.”
“This decision didn’t come overnight. I have been considering it for a few months,” Novick told fin24.
MoneyWeb suggests Novick’s departure was due to Bidvest seeking to improve the company’s financial performance. Since Bidvest took a 20% stake in Comair in 2007, the share price has declined 22%. Bidvest has since increased its stake to 26%.
On Monday Comair held a board meeting attended by Brian Joffe, CEO of Bidvest, even though he is not a director of the company. It was decided at that board meeting that Novick should go.
In an interview with Moneyweb, Novick said: “The board debated it and their preference was (for) Erik and I supported that. Bidvest were involved as well – even though they are not (represented) on our board, they are our major shareholder and were involved in the decision.”
Venter said that the process that led to the board’s decision to appoint a single CEO was based on the integration of processes and systems across the organisation over the last year.
Comair is trying to turn its financial situation around as it faces a tough economic climate and very thin margins inherent to the airline industry. “To be completely frank with you… we haven’t delivered good returns to shareholders for a very, very long time even in the years when we were making R100 million profit it was still a tiny margin and I think a poor return for shareholders and the share price has confirmed that, that the company hasn’t performed financially,” Novick told MoneyWey.