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Zurich - South African Airways (SAA) learnt a number of lessons from its controversial Airbus deal, according to the airline’s chief executive officer Musa Zwane.
SAA in 2002 entered into a purchase agreement with Airbus to acquire 20 A320 aircraft.
The first ten of the A320s had been supplied an delivery of the remaining aircraft was expected to take place by 2017.
However, former Finance Minister Nhlanhla Nene had put forward a transaction plan that would have seen SAA swap the purchase of the remaining 10 aircraft for a lease of five A330-300 planes.
The swap deal meant that SAA would no longer be required to pay additional pre-delivery payments to Airbus, which would have cost R603m.
Drama around the deal ensued when SAA Chair Dudu Myeni attempted to renege on the leasing contract.
Myeni and the SAA board wanted to amend the transaction to allow SAA to purchase the A330-300 aircraft and then enter into a sale and leaseback deal with a local lessor.
Following President Jacob Zuma’s sacking of Nene on December 9 2015, SA's new Finance Minister Pravin Gordhan in late December backed Nene’s previous swap deal.
"The messages received from stakeholders about the deal were very confusing and it led to suboptimal decisions being taken and resulting in people deciding to do nothing, because things were not clear," said Zwane who was in Zurich for a CEO board meeting of Star Alliance airline carriers.
"A big learning point for me about that deal was, therefore, that communication is very important. Inconsistency in messaging and a lack of clarity prevents issues from being fast tracked," he explained.
Zwane further said the first of these new aircraft was expected to be delivered by September or October this year and then about every three to six months thereafter.
Push to break even
Zwane is the seventh permanent or acting CEO at SAA in about four years. He was appointed SAA CEO in November 2015.
SAA in recent years has struggled financially as it last posted a full-year profit in 2011.
Zwane, though, said SAA must push to break even and even look to opportunities to expand its fleet, including acquiring new narrow body aircraft.
"It is now key for us to drive SAA back to a position where, even if it makes losses, those losses are as close as possible to breaking even.
“We must channel our energy into our business and not allow the noise around us - including political issues - to distract us," added Zwane.
