Last year I had introduced the new South African Airways (SAA) Board to the employees of SAA. There was an urgent need to strengthen the leadership of the airline and boost the morale of staff, especially in light of the operational and governance challenges it was experiencing.
Decisive action was called for in order to bring about leadership stability in the airline. I assured the staff, as the Shareholder Representative, and given the significant socio-economic contribution of the airline and developmental role it plays, that I would support the airline in addressing the challenges.
It gives me great comfort that the staff have remained diligent and dedicated in the performance of their duties. The airline has maintained high operational performance and standards even as we sought to fly the airline through the turbulent weathers.
I would like to reiterate that the Government and the department in particular will continue to provide Shareholder support in an effort to bring the airline to commercial sustainability.
I wish to thank the Board, led by Ms Dudu Myeni for its dedicated and direct leadership during this period.
The Board has had the challenging task of stabilising the airline in the midst of governance challenges which included finding a suitable candidate for the position of Chief Executive Officer (CEO).
I am pleased that, the Board, Management and staff have remained focused on the task at hand.
I continue to hold the view that South Africa requires a strong national carrier to play a critical role in the economy SAA operations
The airline operates in a highly competitive sector and the pressure on yield and costs continue to mount.
I have requested that the Board focus on cost reduction and maximising revenue.
The immediate priority was to deliver a long-term vision and strategy that would see SAA transforming into a competitive and operationally efficient airline, with clear plans and targets for the short, medium and long-term.
Given the airline’s current operating model, there is a need to explore new ways to improve profitability of its long-haul intercontinental routes, whilst focusing on improved customer experience and interface.
The long-term turnaround strategy
The task team established last year included various stakeholders and I have to acknowledge the hard work of the Executive Task Team led by the Acting CEO of SAA, Mr Nico Bezuidenhout whose dedication, hard work and professionalism is commendable.
The Executive Task Team met every week during the past four months, and has been instrumental in the drafting of the Strategy.
As you are aware, the Board, on 2 April submitted a Long-Term Turnaround Strategy to me. This is a 20-year plan that will see the airline evolving in many respects. Notably, this is the first strategy in the history of SAA that has been crafted by SAA staff for SAA.
I am advised that staff and management were all given an opportunity to engage and participate on the development of the Strategy. This Strategy therefore belongs to all the employees of the airline and its success is dependent on their commitment to its implementation.
The department is currently reviewing the Strategy and will include all stakeholder departments in view of the fact that SAA remains a strategic national carrier.
Briefly, the document seeks to focus the airline on maintaining a commercially-sustainable business model, which is able to compete in the global aviation market by ensuring the following:
a) Network with an African Footprint and a global reach;
b) Alliances that will support our footprint and allow opportunities to reach other destinations , extending beyond our direct feed without using our own metal;
c) Fleet that is appropriate and efficient to meet our customers’ expectation; and
d) Human Capital delivered by a diverse workforce that is highly skilled, motivated and engaged.
More details on the Strategy will be shared after it is tabled in Cabinet.
Appointment of the CEO
As you are all aware, in October, Ms Mzimela resigned following the resignation of the majority of Non-Executive Directors of the Board.
The new Board was immediately tasked with the recruitment of a new CEO as the position is critical for the implementation of the Strategy.
I am pleased to announce that Cabinet has approved the appointment of Mr Monwabisi Kalawe, as the CEO designate of SAA.
The incumbent holds overall responsibility for the profit-and-loss performance of the company, with direct accountability for all dimensions of the carrier including strategy, commercial, finance, human resources, government/regulatory affairs, legal, information technology and all aspects of operations including flight operations, technical operations, airport customer service, in-flight customer service and systems cargo and operations control.
Given the strategic nature of the role, the CEO must lead an effective programme of liaison with key external constituent groups, including the Shareholder, policy departments, regulators, major suppliers, airport organisations, local community leaders and media to ensure that SAA’s interests are coordinated.
It is critical that the CEO, through change management strategies, instils confidence and improve the morale of the employees of the airline.
The Board assures me that Mr Kalawe has been appointed on the basis of the strength he displays against the competency profile and in comparison with the other candidates who were interviewed.
Mr Kalawe offers experience in airport operations, tourism, global supply chain management and catering services.
Mr Kalawe obtained a B.Sc. in Electrical Engineering, from the University of Natal in 1987 and an MBA from the University of Cape Town in 1998.
Mr Kalawe is currently the Executive Chairman of the Compass Group which is an international catering and support services company.
Prior to this he served as the Country Manager for Compass Group (Southern Africa) from 2008 to 2012.
Some of his career highlights include serving as the CEO of Denel Munitions, the Chief Operating Officer of TFMC (Mvelaphanda) and the General Manager for ACSA at the Cape Town International Airport.
The Board will further engage Mr Kalawe on the terms and conditions of employment as a matter of urgency.
I welcome the appointment of the CEO and assure him of my continued support.
I wish to assure fellow South Africans, once again, that we will continue to pose the difficult questions and to engage robustly with the Board in order to maximise shareholder value and bring the airline to long term sustainability.
I thank you
