South African Airways (SAA) is looking at getting a strategic equity partner to provide capital for the airline, says Finance Minister Malusi Gigaba.
“We will continue to have discussions about the strategic equity partner for SAA because ultimately we are going to need not only private sector capital but also expertise for us to move forward and bring SAA back to sustainability,” Minister Gigaba said.
Addressing a media briefing on Tuesday where new Board members of SAA were introduced, the Minister said the airline also needed new fleets.
“The fleets will not be paid for by the national fiscus or by the mega revenues that the airline is going to generate during this time as they try to turnaround and fund the turnaround strategy,” Minister Gigaba said.
He said a lot of work still needs to be done with regards to the discussions about the strategic equity partner.
“Once we start the process formally we will announce that now we are starting the process of seeking a strategic equity partner for SAA and the structures that are going to manage that process will also be announced,” Minister Gigaba said.
Furthermore, the airline would also engage with its Angolan colleagues on the repatriation of R1 billion to contribute towards the cash reserves of the airline.
Earlier today, the Minister had a meeting with the new board of SAA. The new Chairperson for the airline is Johannes Bhekumuzi Magwaza, while Nolitha Fakude will serve as Deputy Chairperson. The non-executive directors are Geoff Rothschild, Ahmed Bassa, Tinyiko Mhlari, and Martin Kingston.
Minister Gigaba said during his meeting he addressed a number of challenges including cost containment measures, the issues of ensuring that there is proper communication between the internal and external stakeholders.
“Top most on our agenda is the implementation of the turnaround plan so that we can bring the airline back to financial sustainability.
“I want the board to make sure the turnaround plan becomes embedded not only in the corporate pan but the entire functioning of the organisation and it becomes a part of the livelihood of all members of the airline,” he said.
With regards to the turnaround plan the Minister has indicated to the board that he wants them to report to him by December this year on the cost containment measures that they are going to implement in support of the turnaround plan.
“I expect that the board will pay urgent attention to how they are going to ensure that in implementing the turnaround plan we also implement the remedial action that was proposed by the three forensic investigations that was conducted by the airline and we engage with other stakeholders within the airline to address some of the challenges that have been raised with us before,” Minister Gigaba said.
Optimal cooperate structure
He said as the shareholder he will be paying attention to the establishment of an optimal cooperate structure for the aviation assets.
“That means the consolidation of our airline assets, South African Airways, Mango and South African Express. An inter-ministerial committee is being established in that regard.
“The relevant ministers will be working together to address all those issues and provide a way forward that will ensure that we can optimise resources, we can optimise our assets and gain more value from that,” Minister Gigaba said.
Measures to improve operation
He said one of the few things that the new Chief Executive Officer must do is establish very clear control measures that will improve the operation of the airline and ensure that it can deal with irregularities, maleficent and re-establish the confidence among the public, stakeholders of SAA as well as its patrons and the internal stakeholders
The airline has submitted its annual financial statements to the Auditor General and expects a final opinion in December.
The board’s annual general meeting (AGM) was supposed to be on the 28 October this year but it had to be postponed given the fact the annual financial statements had not been finalised.
The next AGM is expected to be held by 28 January 2018.