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SAA CEO Musa Zwane implores govt to speak with one voice

Jun 03 2016 11:44
Carin Smith

Dublin - It is vital for the future of South African Airways (SAA) that the government starts speaking in one voice, acting CEO Musa Zwane told Fin24 on Thursday.

Zwane is the 7th permanent or acting CEO at SAA in about four years.

"Government must decide if it wants to capitalise on SAA or privatise it or whatever it wants to do," Zwane said at a media gathering hosted by Star Alliance - of which SAA forms part - at the annual general meeting of the International Air Transport Association (Iata).

"It would certainly help if the SA government had one consistent message about SAA."

He used the success of Ethiopian Airlines as an example of what can happen if a government works well with a state-owned entity.

"Ïn Ethiopia all government ministries are aligned to support the national airline. On the other hand, in SA there is a lack of integration regarding SAA between Home Affairs, the Department of Transport, the Department of Public Enterprises and the Department of Tourism... We therefore need an integrated approach," said Zwane.

"We at SAA want to be given the opportunity to at least provide a meaningful input and participate in whatever process government decides to follow regarding the future of the airline. Right now SAA seems not to be part of any such conversation."

An example to him is the mention of the possibility in this year's National Budget that parastatals like SAA could even be privatised or sold.

"There is a communication problem between us and Treasury about these issues, for instance. We are getting mixed messages. The SAA board has said that there is no talk about privatisation," said Zwane.

At the same time, he pointed out that SAA has been on track with its cost reduction goals and has made progress in meeting its revenue target.

"Our cost drive is working and our revenues are increasing, but we cannot get away from our exposure to hard currencies. Some of our leases and maintenance agreements are in hard currency terms, while our revenue is rand denominated," he explained.

"Our cost structure is 60% in dollar and 40% in rand, while our revenue income is 40% in dollar and 60% in rand. So 20% needs to be hedged."

Security and safety

Zwane said it became clear for him at the Iata AGM that security and safety are big concerns in the aviation industry at the moment.

"It is very important that we put a high priority on this. At SAA, safety is key. It is not just about our planes, but also about the environment in which they operate. That is why we work closely with Acsa (the Airports Company SA) to guard against infiltration by people who could threaten safety and security," said Zwane.

* Fin24 is a guest of Iata at its AGM.             

saa  |  iata agm  |  airlines  |  aviation
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