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Johannesburg – According to Finance Minister Malusi Gigaba, the appointment of a CEO for South African Airways (SAA) will be finalised by the end of July 2017.
Gigaba was speaking at a briefing at the JSE on Thursday where he revealed a 14-point action plan to revive the economy. Each action item has a minister assigned to it along with a deadline. Details of the plan will be revealed at the mini budget in October, he said.
Treasury will monitor the implementation of the plan, and according to Gigaba the deadlines will be effective.
Gigaba warned of tough times ahead and said the economy is strained, with a growth target of 1.3%. The 14-point plan aims to boost confidence in the economy and was drawn up following consultation with the president, several ministers and stakeholders such as ratings agencies and investors who raised several concerns.
READ: Gigaba unveils 14-point action plan to revive economy
The plan seeks to address issues at the local airline, which is an action item on its own. According to this, Gigaba will appoint a chief executive by month-end. Other deadlines include the finalisation of the five-year turnaround plan, which he is responsible for. The deadline for this is December 2019.
Gigaba will also oversee negotiations with lenders to extend debt to the airline for the longer term. This will be finalised by October 2017. The board has made a submission about their preferred candidate to him, having followed due process.
“I have applied my mind, prepared a Cabinet memo and submitted the memo to Cabinet.” The appointment should be finalised following the next Cabinet meeting, he said.
ALSO READ: AA bailout is ‘fiscally neutral’ – Gigaba
Treasury recently gave the airline a R2.2bn bailout. Gigaba assured journalists that this was within the fiscal framework, Fin24 previously reported. This followed after Standard Chartered pulled out as a lender to the airline.
Gigaba said that other lenders remain committed to the airline.
“So much has happened at SAA. So many CEOs have come and gone. None of them have stayed long enough to achieve what is possible.
“So many turnaround strategies have been developed. So much money has been invested into the airline in the form of guarantees and bailouts.”
Gigaba said public resources could no longer be given to finance inefficiency. “It erodes public confidence in the airline and the decisions of government.”
Gigaba said a CEO experienced in running companies as large as SAA is needed, someone who could “grab the bull by the horns” and make SAA what all South Africans wish it to be.
This decisive action, according to Gigabe, shows lenders that the loans given to the airline are taken seriously.
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