Blaming his detractors for blocking the beleaguered South African Airways’ turn-around strategy, chief executive Vuyani Jarana has resigned from his high profile job after submitting a three-month notice, his office said on Monday.
According to his resignation letter, Jarana will work till 31 August 2019 after being appointed as CEO in November 2017. He had the challenging task of returning the cash-strapped state airline to financial health but decided to quit his job due to uncertainty about funding, and the red tape processes that are delaying the airline’s turnaround strategy, he said.
“The strategy is being systemically undermined, and as the Group Chief Executive Officer, I can no longer be able to assure the board and the public that the long term turnaround strategy is achievable,” he said.
At the time of his appointment, SAA had US$657 million in debt that was maturing on 28 November 2017. The airline also had a turnaround plan, which had not yet been implemented, Jarana said in his resignation letter.
Under Jarana’s watch, a revised corporate plan was developed and the government it in March 2018. This plan required funding of US$1.6 billion and would see SAA break-even by 2021. But since 2018 there have been three incidents in which the company was unable to pay salaries due to lack of funding, Jarana said.
“Whereas government injected $657 million of funding in the 2018/2019 financial year, a big chunk of that was used to fund creditors up to the end of March 2018. We have not been able to obtain any further commitment from government, making it very difficult to focus on the execution of the strategy,” Jarana said.
“I spend most of my time dealing with liquidity and solvency issues. Lack of commitment to fund SAA is systematically undermining the implementation of the strategy making it increasingly difficult to succeed,” the outgoing CEO said.
Jarana also raised “the speed of decision making” from government agencies as a concern. “It is impossible to succeed in the turnaround with the current level of bureaucracy we have to go through to implement strategy,” he said.
NM/jn/APA