Opinionista Onkgopotse JJ Tabane 14 March 2013

Dear Minister Gigaba, let’s talk frankly…

Though Minister of Public Enterprises Malusi Gigaba cannot be held accountable for all of the shameful recent history of South African Airways and the cost of its mismanagement to the nation, recent events have continued to read like a cheap romance. Only a new approach to ownership and management of SAA can save the national carrier.

Dear Minister Gigaba,

You have been very busy Minister… dissolving and appointing new boards for the public sector can’t be an easy job especially in the face of no deployment support. I know you are on your own. Also, that someone like Cheryl Carolus – a stalwart of the ANC – quit your board is something that not many people could just shrug off. But you did. And then you appointed a successor not prone to staying in power, given the drama since you intervened to install him as flag bearer.

Sometimes when I observe what is going on in our parastatals, I fear for fiction writers in South Africa. They could soon be out of jobs because the reality of our situation is, frankly, more dramatic and more interesting than any fiction. It was like the plot of a Mills & Boon novel: the chairman is declared acting chief executive and the acting chairman appointed in his place then turns on him and effectively fires him. Then, against the backdrop of denials about collusion between Mango and SAA, the CEO of Mango becomes acting CEO of SAA and goes on air to literally punt himself as the next CEO. You have to agree with me Minister, this is utter chaos.

Speaking to the stewards and ground staff – there is a collective sense of embarrassment about what is happening. What was painful was when some of the staff surmised that the detractors of our government must now surely be laughing as they sit talking in bars and at dinner tables. I know none of this was your fault, really. That place has been cursed since the days of Sakie Macozoma as Transnet chief. The multi-million payout of Coleman Andrews, not rivalled even by those so popular with former SABC CEOs, remains one of the biggest parastatal scandals of our time. Let me not chronicle the eras of André Viljoen and Khaya Ngqula, each with his own episodes in the ongoing drama that is the “national carrier”. But I am tempted: Who can forget the hedging calamity costing R6 billion under Viljoen’s watch and the crippling strike of 2005 that brought the carrier to its knees for days under Ngqula’s watch? And though this is not a history of the airline, it appears that, in terms not uncertain, the airline’s not gonna stop bleeding anytime soon.

So what are you going to do, Minister?

Let me put my cards on the table very quickly. I believe in the flag carrier as a strategic asset of our nation – I am thrilled at the idea of this flag landing in different destinations around the world every day, but it is beginning to burn a hole in the fiscus at a rate that is hard to sustain. Is it not time that we looked outside the public sector for help? A model where another carrier or private company owns 49% of the airline will be the most radical decision you can make that is likely to pay. Granted, there is panic that if that happens people may lose their jobs. But, alas, this is exactly the problem: there are people, who can be best described as dead wood, hanging on to their employment much to the detriment of SAA and the country. Surely, the issue of overstaffing and crazy benefit contracts for cockpit crew cannot be skirted forever. Only a hard-nosed businessman at the helm will coldly deal with this matter and only keep the staff necessary to run an efficient operation – even if it means grounding the airline for a few days during the inevitable fight for the status quo by the unions.

But even that does not have to be all. Without pretending to be a turnaround specialist, Prasa, a sister company, seems to be on a growth path with all the billions of infrastructure spend ahead. Surely it can hire some of the people who may no longer be required at the airline – among other solutions that can emerge out of the very fact that these parastatals are essentially sister companies. That may sound like a long shot but, frankly, some staffers will just have to take packages and go and create jobs elsewhere or even retire.

Whatever we do, it cannot be business as usual. Just swapping a Coleman for an André will do nothing for the airline. It has not worked in recent times. We have had so many turnaround strategies that the place will now turn on its head. There is a point at which a wound cannot be helped by plaster and surgical amputation becomes the answer. That time has come and gone for SAA. It is now terminal by all indications. The sad thing is, while none of this is your fault, when this leadership chaos trickles down to operations and we have a repeat of the Helderberg, or some demotivated worker forgets to affix the engine properly, à la Nationwide, and kills people, it’s  gonna be your head that’s gonna fry.

It is simply amazing, actually, that despite this chaos, more than 200 flights take off and land every day without much incident. One is tempted to get the pilots – who seem to know what they are doing – to be considered for the new leadership and shareholder structure. That way they will think twice when they insist on their bizarre privileges. The unions must remain a counter-force that can create a sense of accountability. The horrible chaos that we saw when the board overruled the CEO on his delicate negotiations with the unions is one of the worst corporate actions seen in recent corporate history. There is nothing that sows more chaos than collapsed governance as a result of the board, the executive and shareholders all trying to run the place. They can only run it in one direction – down.

Minister, I know you have the courage of your convictions and you are not an ideologue. It is time to do something different at SAA, even if it’s just to prove that you are sane; that you are not planning to do the same thing in the expectation of different results.

Your checklist is simple:

–        Fire the current board – it has already failed you and has brought SAA into new levels of disrepute. 

–        Reinstate Cheryl Carolus – I know it’s a long shot but you can’t appoint some newbee who’s gonna be involved in guesswork. Better the devil you know. She won’t take nonsense from you – making sure you keep your nose out.

–        Appoint a CEO from the international airline industry – not someone who is gonna spend the balance of your term of office experimenting. Our own timber has failed us on this score. We are a global citizen for a reason – use this citizenship. 

–        Give the new board a clear mandate of finding an international airline partner that will own 49% of the airline by the end of this year. That leaves government in control without taking all the risk. There is no longer logic in owning 100% of a non performing asset that has been bleeding you dry continuously at least 15 years.     

Mark my words, if you don’t take these basic measures, or an approximation of them, you may well be signing one of two things in exactly 18 months: your letter of resignation, or another R5 billion bailout. Doing nothing, or more of the same, is no longer an option. Our country’s flag deserves a better carrier.

Yours frankly,

Onkgopotse JJ Tabane DM


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