All data is delayed
See More

SAA's Dudu Myeni heading for a crash landing?

Feb 29 2016 06:00
Adiel Ismail

Cape Town - It is likely that South African Airways (SAA) chairperson Dudu Myeni will lose her job as Finance Minister Pravin Gordhan aims to fix the embattled state airline, according to economist Dawie Roodt.  

This comes amid reports that Myeni, who is a close friend of President Jacob Zuma, shares a seemingly frosty relationship with Gordhan.

However, SAA spokesperson Tlali Tlali told Fin24 that a meeting is scheduled to take place soon between the two parties.

"We have no reason to be concerned in terms of the state of the relations between SAA and National Treasury or the minister of finance," he said.

A merger on the cards

Gordhan announced in his 2016 Budget Speech that he, together with Public Enterprises Minister Lynne Brown, agreed to explore the possible merger of SAA and SA Express, under a strengthened board.

Since December when he was reappointed to Treasury, Gordhan had his sights set on SAA. Shortly after taking on the role, he promised to stabilise the embattled airline, adding that discussions with Myeni was one of his first orders of business.

As the finance mininster, Gordhan has the power to appoint and remove board members since executive authority over SAA was transferred to the Treasury in December 2014. These powers are outlined in the SAA Act, Public Finance Management Act (PFMA) and Companies Act.

Myeni has extremely close ties with Zuma and many believe he fired Nhlanhla Nene as finance minister over his resistance to a proposed Airbus swap deal.

Now Gordhan is apparently determined to remove Myeni from the airline's board, reported the Sunday Times, adding that he allegedly informed Zuma about his intentions.

According to a source, Zuma ignored Gordhan, forcing him to repeat his intentions. "This time the president simply responded that he had heard him. He never said yes or no, or asked why," reported the Sunday newspaper.

'Opportunistic and malicious'

Tlali told Fin24 three meetings have taken place between SAA and Gordhan since he took over as finance minister.

"Since his reappointment to this portfolio as the minister of finance, SAA's board of directors interacted with Minister Gordhan on at least three occasions and on two occasions through direct meetings."

Tlali said Myeni was present in two meetings and on one occasion the chairperson was in a telephonic conversation with the minister.

He said people suggesting there is a rift are "opportunistic, malicious and simply misleading everybody" who are concerned about the relations between National Treasury, the minister and SAA.

"I can indicate to you that there is a meeting that is scheduled to take place soon, but I do not have the date on hand," Tlali said.

"We continue to have a solid and professional relationship based on mutual respect between ourselves and the finance ministry. Suggestions that there are no interaction or the relationship is not healthy are simply misleading".

Gordhan will boot out Myeni

Roodt told Fin24 that although SAA is a politically sensitive issue, he thinks Gordhan will get rid of Myeni.

"I have a suspicion that Pravin Gordhan is going to force his will through and in the process Dudu Myeni will lose her job, which is a good thing. I think he is going to get what he wants and that is to merge SAA with SA Express."

However, he said that a merger won't make much of a difference despite the benefits that may come with it.

"SAA has been a disastrous institution for a very long time and SA Express is a tiny airline, so from a financial point of view it won't make much of a difference, but it is certainly a step in the right direction," said Roodt.

He recommended that the government privatise SAA, but he indicated that Gordhan already alluded in his Budget Speech to bringing in a minority equity partner.

"I think what they are going to do is see if they can get a minority private sector shareholder and it will make sense if it is an international airline so that they can make use of the opportunity as a springboard to offer services in Africa," said Roodt.

The Treasury was not available for comment.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.


Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you use all your downloaded apps on your smartphone?

Previous results · Suggest a vote