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In an exclusive interview, new South African Airways head Coleman Andrews (below) outlines his strategy for the troubled carrier, and talks about new partners, as well as the long-awaited privatization.
South African Airways is seeking to add fresh impetus into its privatization programme with the appointment of airline troubleshooter Coleman Andrews as chief executive. Transnet, the parent company of SAA, believes that Andrews, credited with saving World Airways from bankruptcy, has the expertise to put SAA into the black when it separates from Transnet and becomes a single corporate entity before privatization. Saki Macozama, managingdirector of Transnet, describes Andrews as "one of a handful of people who has the expertise to turn SAA around".
Andrews succeeds Mike Myburgh, who has taken early retirement, and his appointment follows the departure of executive director Zukile Nomvete on May 8. Nomvete was blamed for poor financial results in the past two years.
The South African government has set an October deadline for the announcement of a strategic partner for SAA, with an equity stake of between 25% and 30% in the flag carrier. Stella Sigcau, minister for public enterprises, who is responsible for over-seeing SAA's privatization, insists that the October deadline will be met.
SAA will have to gain independence from Transnet and negotiate its corporatization against the background of its parent company's financial liabilities. Transnet, which has debts of more than R4 billion ($730 million) is owed R2 billion by SAA. Negotiations are under way with Transnet's lenders, to allow SAA's split. SAA also has external loans valued at R1.7 billion and liabilities estimated at R2 billion. The airline suffered record losses of R323 million last year and analysts are forecasting further losses for the financial year ending in March 1998, with a poor performance compounded by currency weakness.
Andrews, who joined SAA on June 15, has been mandated to tackle the airline's poor financial performance. "I have been asked to develop and implement a strategy that makes South African Airways a much stronger airline," he says. "I will make it an airline that customers love...