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SAA board confident in new CEO

Feb 13 2013 08:03

Johannesburg - The SAA board has confidence in its new acting CEO Nico Bezuidenhout, it said on Tuesday.

"Nico is a very experienced colleague and airline executive, having been appointed CEO of Mango in 2006. We are very pleased that he agreed to oversee operations and we have every confidence that he will... provide the necessary leadership during this period," said chairperson Dudu Myeni.

The SAA board announced on Monday that it had placed former acting CEO Vuyisile Kona on precautionary suspension, with immediate effect, based on allegations which it had a fiduciary duty to investigate.

On Tuesday, Myeni said the board's decision to ask Bezuidenhout to oversee the business in the interim was meant to allow business continuity.

Over the years, SA Airways (SAA) has had to ask for several bailouts from the government because of its precarious finances.

Most recently, in January, it received a R550m bank "facility" to cover fuel and other short-term commitments, the Sunday Times reported.

A number of SAA board members, including chairperson Cheryl Carolus, unexpectedly quit last year, before the AGM in October, when their term was due to end.

At the AGM, SAA reported a R1.3bn operating loss for the year. The airline's losses over the past decade amount to R14.7bn.

In early October, the National Treasury announced that SAA had been given a R5bn government guarantee to recapitalise. This would enable it to borrow from financial markets and buy new aircraft. Public Enterprises Minister Malusi Gigaba's spokesperson Mayihlome Tshwete, said on Tuesday that the reasons for Kona's suspension could not yet be disclosed.

"This decision was taken by the board... and they would prefer not to communicate on some of those points at this stage. Such a decision could not have been an easy one. The company is facing a difficult time."

Tshwete said Gigaba would assess and monitor the situation and intervene when needed.

"We respect the difficult decision that the board had to make. We will assess it and make further intervention. Our focus is the well-being of the company and the employees, and the well-being of the economy."

Tshwete said that while SAA's financial situation was not a secret, matters had to be dealt with sensitively.

"SAA is going to have to be kept operationally stable. We must enable it to go to financial markets and speak to institutions and borrow money," he said.

The SA Transport and Allied Workers' Union has welcomed Kona's suspension.

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