New South African Airways chief executive Vuyani Jarana is in no doubt of the size of the task he has inherited and is wasting no time to tackle its challenges.
"The biggest single issue for SAA is it has been a loss-making airline for decades, so we have to restructure the business, rebase it, make sure it can come back and be profitable," he explains. "So we have put together a very solid and ambitious plan to make sure the business breaks even in three years time. Now obviously the big part is around making sure we have funding to support the turnaround plan and this is what we are talking to the shareholders."
Former telecoms executive Jarana took the helm in November and is working with a management team including former Brussels Airlines and Air Malta boss Peter Davies as chief restructuring officer.
"The costs are too high and we must take out the cost, but in a number of areas, whether it is in supply chain, how we buy things, business simplification, but also pure areas around headcount," he says. "We have to rightsize the business.
"Looking at the fleet and network, we are probably quite thin for the size of the business we are running," he adds. "The immediate issue is we have an older part of the fleet, we have to make decisions quite quickly, especially given the oil price movement now, so we are working very hard in terms of re-tuning the network.
"By September we should be able to present to the board a new growth path for SAA with associated fleet requirements, and then we have to find the right commercial construct within which we can refresh the fleet without putting too much burden on the P&L."
Source: Cirium Dashboard
