STATEMENT BY MR. MALUSI GIGABA MP, MINISTER OF PUBLIC ENTERPRISES, ON THE OCCASION OF THE ANNOUNCEMENT OF THE NEW SAA CHIEF EXECUTIVE OFFICER AT AIRWAYS PARK, KEMPTON PARK, ON 19 APRIL 2013
INTRODUCTION
Last year Late last year I had introduced the new SAA Board to the employees of was here at SAA addressing the staff and Management and introducing the new Board appointed to ensure the company had strategic leadership. The airline had just lost a CEO and the former Board had resigned en-masse.
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. airline was at a strategic and sensitive moment in its 78 years of existence.
Decisive action was called for in order to It was necessarybring about leadership that stability be brought back into SAAin 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. Furthermore, in November on this stage, I also acknowledged the challenges faced by the airline and how I would request the support of all 11000 staff employed at the National Carrier,
It gives me great comfort that the staff have remained to work with greater diligencet and dedicationed 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 also would like to reiterated that the Government and the Department in particular support of the Department and Government wouldwill continue to provide Shareholder support in an effort to bring the airline to commercial sustainability. , however , I need to quantify this support, the support of the Department would be based on prudent and clear deliverables.
I should at this time wish to thank the Board, led by Ms Dudu Myeni as the Acting Chairperson for itstheir dedicated and direct leadership during this period. .
The This Board has had the challenging task of stabilising the airline in the midst of , dealing with corporate governance challenges which included finding a suitable candidate for the position of CEO. and lead the process of appointing a new capable Chief Executive Officer.
The airline has and continues to be the focus of the glare of the media for all the wrong reasons. II am pleased thank you allthat, the Board, Management and staff have , for remaininged focused on the task at hand. , steadfast in your work and diligence in ensuring that flight took off and landed safely.
I can assure you all that
I more than ever, continue to hold the view that South Africa requires and needs a strong national carrier to play a critical role in the economy in that it is responsible for the significant share of international and regional arrivals to South Africa.
SAA OPERATIONS
The airline continues to operates in a highly competitive sector and the pressure on yield and costs continue to mount.
I have requested that the Board SAA ffocus on cost reduction and maximizing revenue. I had instructed the Board late last year and in all my engagement that a stable and financially prudent airline was required
The immediate priority was to deliver a I had also mentioned that the airline requires a llong-t-term vision and strategy that would see SAA to transforming intobecome a competitive and operationally efficient well-run airline, with clear plans and targets for the short, medium and long-term. future, including on such issues as fleet procurement.
Given the The airline’s oairline’s current operating model, there is a need to continues to be reviewed and debated , I REQUEST that you appreciate the need to explore new ways to improve profitability of its long-haul intercontinental routes, whilst focusing on improved customer experience and interface. The time for a paradigm shift is now
THE LONG-TERM TURNAROUNDS STRATEGY
The task team established last year I had formed a task team that included various stakeholders and I have to acknowledge the hard work of the EExecutive Task Task TTeam that was led by the Acting CEO of SAA, Mr Nico Bezuidenhout whose dedication, hard work and professionalism is commendable. Nico thank you for the hard work and dedicated manner you led the company.
Theis Executive Task Team met every week during the past four months, and has been instrumental played a critical role in the drafting of the Turnaround Strategy.
As you are aware, the Board, on 2 April I am proud to announce that SAA Board submitted a Long-Term Turnaround Strategy to me.
This is a that is a 20- year plan document that will see the airline evolving in many respects. assist draft the end-state of the airline on the 2nd of April as agreed. Please note I agreed with the Board that submitting a strategy on April Fool’s day would not have been prudent
Notably, Tthis is the first strategy in the history of SAA that has been crafted by SAA staff for SAA. at SAA. I therefore request staff to name this Strategy. The strategy has taken 80 days and plenty of hours and sweat.
I am advised that all staff and all management rs were all given an opportunity to engage and participate on the development of the sStrategy. and include suggestions.
This Strategy therefore belongs to all the employees of the airline and its success is dependent on their commitment to its implementation. document belongs to each and every one of you.
The Department is currently reviewing the documentStrategy 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.
and is therefore a strategic asset that requires inputs and engagements with all key partners and friends in state. More details on the Strategy will be shared after it is tabled in Cabinet. It will once submitted to Cabinet for approval be given to all and sundry to engage with the document.
As a summary, the document seeks to focus the airline on maintaining a commercially sustainable business model, that is able to compete in the global aviation market by ensuring the following:
Network with an African Footprint with a global reach
Alliances that will support our footprint and allow opportunities to reach other destinations , extending beyond our direct feed without using our own metal
Fleet that is appropriate and efficient to meet our customers’ expectation and)
Human Capital delivered by a diverse workforce that is highly skilled, motivated and engaged.
The DPE is to engage with all stakeholder department and various workshops with Directors-General of various departments are to be set. This will also offer the internal processes at DPE to review and propose additional amendments to the document. Once again thank you to the Board Sub Committee led by Mr Andile Khumalo.
APPOINTMENT OF THE CEO ANNOUCEMENT
As you are all aware, in October, the CEO, Ms Mzimela resigned following the resignation of the majority of Non-Executive Directors of the Board.
The I therefore, appointed the new Board was who were immimmediately tasked with mandated it to undertake the recruitment of a new CEO as the position is critical for the implementation of the Strategy. as a matter of urgency. I had therefore given the Board three months to finalise the recruitment of the new CEO and to fill the other vacant executive positions without delay. I am here today to formally and officially announce the new CEO of this wonderful company.
In the first week of April 2013, the Board submitted to the me a list of candidates who have gone through the recruitment process and should be considered for the appointment of CEO. I have considered the submission and Cabinet has since ratified by decision Mr …………………………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, instills 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 am confident that the SAA board and Executive team along with you all will give Mr x your support. He comes to SAA at a Rubicon time when there is a lot of expectations of SAA to turnaround. Mr X is assured of my support.
I must wish to assure fellow South Africans, once again, as I did in a meeting last year 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
Red additional for your input and review.
The most crucial element of the LTTS is that it requires the immediate integration of the airline group (SAA Group Holdings) where SAA, Mango and SA Express (SAX) operate as part of one holding company structure. The subsidiaries of the SAA Group Holdings will be consolidated and reported in the consolidated financial statements of the holding company. A new collective Group Vision and Mission will be instilled with subsidiaries strategies aligned to ‘SAA Group Holdings’ strategic objectives. A new network, alliance and fleet strategy will be implemented which will align SAA’s Business model to the global aviation market demand. These alignment measures together with other interventions included in the LTTS will transition SAA to improve performance and adapt to the changing global aviation market which will make it commercially sustainab