CEO, CFO, South African Airways, SAA, finance, bankruptcy, loan, state
Photo: South African Airways

South African Airways under strain, loses CEO

South African has appointed its head of operations as acting chief executive and says it needs 4bn rand (€235mn) to survive the year.

Zukisa Ramasia, head of operations of South African Airways (SAA), has been appointed interim CEO after Vuyani Jarana unexpectedly resigned last week after less than two years in the job.

Jarana said his short time at the airline had been undermined by a lack of state funding and too much bureaucracy, according to Reuters.

Ramasia, who has more than 25 years of experience in aviation, will start her new role on Monday, June 10.

SAA has started searching locally and internationally for a permanent chief executive to stabilise the airline and oversee the implementation of a long-term turnaround strategy, board member Thandeka Mgoduso told a news briefing at the airline’s headquarters.

Financial troubles
The airline has not made a profit since 2011, but Jarana had started a new five-year turnaround plan that includes slashing costs and cancelling unprofitable routes, requiring around 21.7 billion rand (€1.28 billion) in cash injections from the government.

Board member Martin Kingston said the new funding would enable the airline to continue operating until it turns a profit in a couple of years.

“We are currently operating at a loss […] and that is the background to the request we’ve made for 4 billion rand of support for the current financial year,” board member Martin Kingston said.

The airline is in advanced talks with lenders about repaying a 3.5 billion rand bridge loan due in July and extending a 9.2 billion rand long-term loan over a protracted period of time, on condition of the government’s ongoing financial support, Kingston said.

Interim CFO Deon Fredericks added that the airline had also approached three additional lenders, which include international lenders, for short-term funding.

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