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SAA’s escalating state of disarray
The chaos at South African Airways (SAA) has always been legendary, and with the apparently untouchable chairwoman Dudu Myeni at the helm, this year was no different.
2015 kicked off with CEO Monwabisi Kalawe in the naughty corner. He’d been in his post for a year when he was suspended for – among other things – using the company’s spy cameras in his office so that he could foil a sexual harassment claim.
Spying was a common theme this year – Myeni snatched a “spy pen” away from CFO Wolf Meyer during a meeting, and she banned all recording devices, including cellphones, from any work discussions.
Nico Bezuidenhout, who’d stepped in as caretaker in November 2014, was doing a great job implementing a turnaround programme, but in June Myeni dispatched him back to being CEO of SAA’s low-cost airline Mango – apparently without asking the board or Treasury.
Thuli Mpshe – head of HR – was boosted into the saddle. She lasted four months: Myeni had taken it upon herself to restructure a deal with Airbus forged by CFO Meyer.
The deal switched SAA’s aircraft purchase agreements to a lease agreement, which would save it billions. But Myeni demanded the planes be sold to a BEE company, from which SAA would then lease the planes.
Airbus’s astonished CEO Fabrice Brégier demanded a R1.6bn deposit be transferred immediately, and Mpshe released a document saying things about the airline that made Myeni incandescent with rage.
finweek can’t say what was in the report due to a bizarre gag order brought by SAA in the middle of the night after it was first printed (at the time of going to print, media companies were in court to get the order lifted).
Needless to say, Mpshe’s indiscretion saw her back at HR before she knew it, and Musa Zwane, head of technical, took over. Meyer – furious about Myeni’s deal-making – resigned.
Sylvain Bosc, chief commercial officer, was suspended for allegedly fiddling with the numbers to make an Abu Dhabi route look promising.
As yet no one’s yet understood what Bosc – a highly experienced French airline specialist – could have gained from the con if there was one.
The grand finale though was what appears to be SAA’s income statement for the year to 31 March, which is expected to show a jaw-dropping loss of R4.4bn. If it turns out to be true, it will be the worst loss in the airline’s history.
At the time of going to print, reports had it that, according to an EY draft report, up to 60% of procurement at SAA could potentially be subject to “weak business controls”.
This is an excerpt from an article that originally appeared in the 17 December edition of finweek. Buy and download the magazine here.
