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'I wouldn't characterise it as state capture' - CEO Jarana on SAA

Jun 12 2018 14:09
Carin Smith

Sydney – A "bit more work" has to be done to clean up business at SAA – but he will not go as far as to call the airline's problems state capture, CEO Vuyani Jarana has said.

Speaking to Fin24 at the 74th annual general meeting of the International Air Transport Association (Iata) in Sydney, Australia, Jarana said it was too early to draw final conclusions.

The meeting took place earlier in June. 

"It is early days to pronounce on anything in this regard, but there are reports that found there were things that did not go right.

"I would, however, not characterise it as state capture," he said.

The next step would be to conclude investigations and take appropriate action, he added. "We now have to take those forensic reports and test the findings. If there are internal people implicated, then there are processes at SAA which will take its course.

"If companies outside SAA are found not to have taken appropriate action, then we will also deal with that.

"We have the reports and the board has decided to do more forensic investigations on top of that."

SA Express

Regarding SA Express, Jarana said it was difficult to say anything at this stage about the recently-grounded low-cost airline.

SAA has been working non-stop to adapt schedules to accommodate SA Express passengers without incurring additional costs for SAA, he said. "We worked out the economics and it is not impacting us. We could accommodate SA Express without strain in our system," said Jarana.

Merger talk

Asked about Public Enterprises Minister Pravin Gordhan's recent comments about South African airlines already working together, Jarana said the SAA board had not directly been approached by the minister regarding any merger.

Gordhan recently told eNCA that discussions regarding the merger of three government airlines were set to continue with other relevant ministers.

"So, we just have to wait and see," Jarana said. "Our focus is on [retaining] customers as much as we can.

He added: "We will work with the direction our shareholder (National Treasury) gives, but we are also clear about the conditions of success that would have to be met."

On the possibility of integrating SA Express, he said timing was everything. "SA Express is very fragile and SAA is in the early stage of transition. So, one must be very careful. I am deeply thoughtful of all the scenarios and what they would mean."

Flagship airline

Asked whether South Africa needed to have a flagship airline, Jarana said that was not what the debate should be about.

Instead, he argued, discussion should focus on promoting the intra-African movement of people, on a continent that is under-served.

"If you want to promote intra-Africa movement, you […] have to increase capacity in a commercially viable way," said Jarana.

"It does not mean the government has to own the whole airline. Government has said it wants private sector involvement."

In his view, "strong and extensive partnerships across the continent" are needed, rather than the notion of "one super big airline across the continent".

The big focus for SAA at the moment was having the confidence that the airline could be turned around, and ensuring an improved customer experience, he added.

* Fin24 was a guest of Iata at its AGM.

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saa  |  iata  |  vuyani jarana  |  airlines  |  aviation
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