South African Airways asks for urgent state funding as interim CEO appointed

South African Airways (SAA) has appointed its head of operations as CEO in the interim and asked for 4 billion rand from the government in order to stay afloat for the rest of the financial year.

The struggling airline, which has not turned a profit since 2011, made Zukisa Ramasia its acting chief executive after Vuyani Jarana unexpectedly resigned on Sunday after less than two years in the job.

Jarana had laid out a five-year turnaround plan for the company that included slashing costs and cancelling unprofitable routes, but he said the plan was being undermined by a lack of state funding and too much bureaucracy.

“We are currently operating at a loss and that is the background to the request we’ve made for 4 billion rand of support for the current financial year,” board member Martin Kingston told a news briefing.

“We are in discussion with lenders about repaying the 3.5 billion rand (due in July) and extending the 9.2 billion rand (of other debt) over a protracted period of time.

“Repaying the 3.5 billion rand opens the door for us to access additional liquidity for the current financial year,” said Kingston.

Jarana’s departure from SAA follows the resignation of Eskom’s chief executive Phakamani Hadebe last month, highlighting the significant challenge South African President Cyril Ramaphosa faces in reforming state-run firms and weaning them off government support.

@ABNetworkOnline