media conference
4 June 2007
I really do believe that the decisions of the SAA Board to achieve a
sustainable turnaround of SAA's finances and to continue to provide a high
quality, reliable service will constitute a major milestone in SAA's long and
proud history. The support that government is giving to the recapitalisation of
SAA is contingent on this comprehensive programme being successfully
implemented.
I think we all know that the international airline industry is highly
competitive and many carriers around the world do receive government support
owing to the strategic role that they play in economies and their links
internationally. In South Africa's case our economy is growing and we face the
challenges of large numbers of people visiting us for business, tourism and of
course the 2010 World Cup. For these reasons it is imperative that the key
elements of the turnaround are achieved or put in place during this financial
year. I am confident that the Board and Management have put in place a very
detailed implementation plan and they will provide insight today and working
with the Seabury Group this plan is now being implemented. Detailed
consultations and negotiations with the Unions will start shortly. The
Department of Public Enterprises and I will give the Board, Management and the
employees all the support we can to ensure the success of the turnaround.
The turnaround will involve an overhaul of SAA's entire business model,
including strategy, processes, people and systems. I am confident that the plan
is well conceived and draws on successful turnaround strategies elsewhere in
the world. However, success depends absolutely on its implementation according
to the time schedule. There are many hard decisions to be taken and these will
be all the easier if we can develop effective collaboration with all
stakeholders. The prize of such collaboration is that SAA will become a
profitable African airline with global reach. This will secure its future and
allow it to serve our air passengers well and provide stable employment for its
workforce. As I indicated in my letter to the Board at the time of the
recapitalisation earlier this year, government is fully behind the turnaround
strategy but will not support the airline if this strategy is not implemented.
Again I stress that the key elements of the strategy need to be implemented
during this financial year.
I wish to stress again that I consider SAA a fine airline with excellent
prospects in the growing South African economy and indeed the African economy.
What gives us the confidence to back the airline is that it has a highly
regarded record of service, safety and reliability. Most of all we have
absolute confidence in the capacities and commitment of its personnel â the
CEO, management, pilots, technical, ground staff and others.
What we have to accept is that despite this excellence and favourable
revenue trends the cost structure of the airline has moved out of line with its
competitors in a very competitive market. We have to internalise this reality
and adjust to it timeously. Failure to do so would be irresponsible in the
extreme as such a failure will destroy this airline we are all justifiably
proud of. There is no time or place for recrimination as to who did what since
that is not the issue â our competitors are moving faster than us and we just
cannot let this continue. Looking back will help little, we have to move
forward and get ahead of some very efficient competitors.
SAA you will have my full support but it is going to be very tough love in
the coming year. I wish management and staff all the strength, determination
and commitment they can muster â a great airline lies in your hands.
Issued by: Department of Public Enterprises
4 June 2007
Source: Department of Public Enterprises (http://www.dpe.gov.za)
