interview<\/a><\/strong> with SA Flyer Magazine editor, Guy Leitch, Jarana was candid about the issues facing SAA, as well as what is being done to turn the business around.<\/p>\nThe group’s financial problems have been widely reported and are well-known, including the fact that it has over R21 billion in debt commitment – R9.2 billion of which matures in March 2019.<\/p>\n
According to Jarana, the airline needs R12.5 billion in shareholder funding to break even and turn to profit. R5 billion of that has come from the recent mid-term budget, in October.<\/p>\n
“The MTBPS stated that the funds would help to prevent a call on the airline\u2019s outstanding debt of R16.4 billion of the total of R19.1 billion guaranteed by government,” Jarana said.<\/p>\n
However, with SAA expecting losses exceeding R5 billion for 2018, much of the bailout is already spent.<\/p>\n
“R3 billion of the R5 billion has gone into paying arrears,” Jarana said.<\/p>\n
“We have the R2 billion and have been working within that limit, helped by better cash flow management, including the fact that Angola started paying us the funds it had blocked.”<\/p>\n
According to Jarana, the group wants to pull in R3 billion more through changes to parts procurement at SAA Technical, which has historically bought parts through intermediaries, with a high mark-up.<\/p>\n
By shifting procurement policies around, costs can be improved by 10%, he said. Additionally, by going through proper tender processes, a further 25% to 30% can be saved just by negotiation contracts better.<\/p>\n
Unfortunately, Jarana said, SAA now has a “history and culture of malfeasance”, which means that every move comes under scrutiny as trust levels are low.<\/p>\n
“Because we have to follow every step of the process, it means you have to take a bit longer to get the outcomes you want.”<\/p>\n
\nRead:\u00a0Government has plugged R57 billion into SAA \u2013 and counting<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"South African Airways CEO Vuyani Jarana says that the airline can be saved, and it is on track and on budget for its turnaround strategy – all he needs is time.<\/p>\n","protected":false},"author":10,"featured_media":137355,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26,1675],"class_list":["post-283060","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline","tag-saa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/283060","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=283060"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/283060\/revisions"}],"predecessor-version":[{"id":283312,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/283060\/revisions\/283312"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/137355"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=283060"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=283060"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=283060"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}