South African Airways (SAA)’s current chief commercial officer Philip Saunders has been appointed as the acting chief executive of the airline which will come out of the SAA rescue process.
The Department of Public Enterprises (DPE) said that in the coming days it will announce the Interim Board of the New SAA.
“The interim CEO for the airline will be Philip Saunders, an experienced airline executive with a strong commercial background,” the department said.
Saunders has extensive experience in the airline industry, having served in C-level positions at Kuwait Airways, Air Malta, and Caribbean Airlines before joining SAA.
Department of Public Enterprises acting director-general Kgathatso Tlhakudi said that the new version of SAA has piqued the interest of various possible investors – both locally and internationally.
This follows Tlhakudi telling Radio 702 that government is happy to give up management control of SAA to investors while retaining a minority shareholding within the national airline.
“We are not obsessed with control. If we find the right partner who is prepared to inject the technology and access to markets that we require for the airline, and they are assuming management control, we are quite comfortable to let go of that,” said Tlhakudi.
Tlhakudi said this arrangement would allow the government to protect certain imperatives while improving the management and governance measures needed to drive SAA’s future success.
“The department hopes that a new SAA can reclaim market share while fighting to compete more in the emerging market space – notwithstanding the impact of the COVID-19 pandemic that will constrain the aviation industry for some time into the future,” said Tlhakudi.
R26.7 billion required
SAA’s administrators have asked the government to provide at least R26.7 billion to rescue the national airline.
This is over R10 billion more than the government had originally said it was willing to give to SAA in finance minister Tito Mboweni’s annual budget.
MyBroadband recently reported that the following could be purchased for South Africans for the price of SAA’s restructuring:
- 169,200 RDP houses
- 205,385 University degrees
- 68,992 medical degrees
- 2.7 million laptops for students
- 14.8 million tablets for students
- 134 million 20GB data bundles for students.
The DA has rejected the plan to rescue SAA from its current situation.
“SAA has been bankrupt for the past decade, relying on bailout after bailout as a succession of poor CEOs squandered all hope of profit and goodwill with poor business practice,” said the DA.
“Liquidation is the only realistic option for SAA at this point. In no way, shape or form should the government be handing out bailouts to a bankrupt black hole of an entity.”
SAA business rescue plan accepted
The DPE has announced that creditors have voted in favour of the business rescue plan for SAA, and applauded creditors and all stakeholders for the decision.
According to the department, 86% of creditors voted to support a business rescue plan for the airline.
“The DPE believes that the favourable vote is a much better outcome for creditors and SAA employees than liquidation, and the government remains confident that the implementation of the business rescue plan will balance the rights and interests of all parties,” it said.
“The priorities for the DPE are now to give effect to funding commitments by the government for the business rescue plan, [and]appoint a new and reconfigured interim board for SAA.”