The South African Department of Public Enterprises (DPE) has announced that it is now working hard to implement the success of the South African Airways Business Rescue Plan.
Department of Public Enterprises said in a statement: “Now that all the conditions for the implementation of South African Airways Business Rescue Plan were met last week, the Department of Public Enterprises (DPE) and stakeholders have been working around the clock to bring the process closer to finalisation.”
All efforts have now been shifted towards the implementation of a four-step process that entails; the restructuring of the ailing airline, implementation of voluntary severance packages to staff, Executive appointments and the selection of Transaction Advisors and the ultimate formation of a lean and modern airline.
“To complete the process, the DPE is overseeing four phases. They are; The restructuring of the airline – including the implementation of Voluntary Severance Packages to employees; the appointment of non-executive directors and new management team; the selection and appointment of Transactional Advisors; and the formation of customer-centric airline designed to be lean, technology capable digitally modernised and agile to service all markets segments,” the DPE added.
The new SAA will retain 1000 employees from the current of almost 4800 strong staff. These 1000 employees are set cover clear roles that will be the foundation of the refined carrier. The retained will staff will be on new terms and conditions from those of the current SAA.
“The retrenchment of all employees with only 1000 employees remaining to start the new airline on different terms and conditions to those currently existing,” the DPE said.
BOARD AND MANAGEMENT TEAM
A new and empowered Board of Directors is set to be appointed that will be responsible for the recruitment of an efficient, qualified and progressive management team. Their immediate task will be the appointment of the Chief Risk, Information and Operating Officers.
Last month for SAA Chief Operations Officer Philip Saunders was appointed as the interim Chief Executive Officer for the new SAA.
A Transactional Advisor has been identified and will be mandated to assist in the short and long-term strategic decisions for the airline. Speaking on the mandate of the advisor the DPE said: “They are mandated to assist department in transaction planning, feasibility analysis, procurement and implementation of transactions and raising funds and investment of the new airline”.
NEW AIRLINE AND CHARACTERISTICS
The new airline will be established to support key economic sectors in South Africa including tourism and solidifying of the Southern African country as an African gateway to international markets.
SAA has been returning aircraft to lessors in the past few months including the Airbus A350 fleet that was delivered as recent as the first quarter of 2020. The DPE aims to see the new airline operate a hybrid modern fleet acquired on competitive rates resulting in cost effectiveness.
Leading to its demise, SAA operated a wide network from its Johannesburg hub to West, East, Central Africa, South America, Europe, Asia and Australia. The DPE would want to see the new airline operating:
- A network structure that allows for connectivity at hubs, while maintaining elevated aircraft utilization.
- Connecting Africa to the world, economic hubs whilst maintaining diplomatic connectivity,
- A right sized and motivated workforce,
- A customer-centric airline designed to be lean, technology savvy, digitally native and agile to service all customer segments.
WHICH ROUTES WILL NEW SAA SERVE?
Based on the Business Plan, the new SAA will gradually grow its network across from domestic, regional and then international. On the domestic routes, the South African golden triangle is likely to be introduced first comprising of Cape Town, Durban and Johannesburg.
Harare, Gaborone, Port Louis, Lusaka, Windhoek, Nairobi, Victoria Falls are some of the regional routes that have been proposed by the new airline.
When the time comes, likely after a year of operations international high yield routes will be launched. These will likely include London, Frankfurt and Washington.
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