South African Airways is making progress with its plan to reach profitability in the next three years, even as it faces challenges such as a jump in fuel prices, Chief Executive Officer Vuyani Jarana said in an interview.
Jarana said he expects losses until the company can break even or achieve profitability at the end of the 2021 financial year as the embattled state-owned airline improves its revenue.
“I’m still quite comfortable about the execution of the plan,’’ Jarana said late Sunday.
The airline reported a loss of R5.7 billion ($398 million) in the year ended in March, more than double what it had budgeted, and received a government bailout last year to avoid a default on debt owed to Citigroup Inc.
The management is considering a sale of the airline’s catering unit, Air Chefs, and outsourcing or selling SAA Cargo, the Johannesburg-based City Press reported Sunday, citing an internal report. It’s also headed to record a R6 billion loss.
The CEO said the leaked document outlines scenarios but no final decisions have been made. He pointed out the the company’s own corporate plan forecasts losses for the next several years.
“On revenue we’re quite happy, but other aspects are more difficult,” he said in an interview.
SAA is watching to see what competitors do about fuel hedging strategy, an unanticipated issue that’s emerged with higher oil prices, he said. The airline has used a hedging policy, “but it’s not an aggressive one,” Jarana said.
The airline’s international business and supply chain reform are core strategy topics, he said.
“We’re focusing a lot on areas where there are revenue leakages due to malfeasance,” he said.
Michael Masutha has not ruled out extradition of Guptas after new treaty with UAE
Justice minister Michael Masutha has not ruled out using a newly-signed agreement between South Africa and the United Arab Emirates to have the controversial Gupta brothers extradited from Dubai to stand trial.
The countries signed the mutual legal assistance and extradition treaties on Monday after negotiations began in February 2010.
“The treaties will enable the two countries to assist each other in the investigation and prosecution of crimes through mutual legal assistance and the extradition of fugitives,” the department of justice and correctional services said.
Although Masutha did not refer directly to the Guptas by name‚ when asked about whether or not the treaty could impact the Gupta case or other high-profile matters‚ he said via WhatsApp: “It certainly will provide the necessary legal framework for mutual cooperation between our two countries in relation to criminal investigations.”
In August‚ the Hawks assured parliamentarians they were working behind the scenes with Interpol to have the Guptas extradited from India or Dubai to face charges linked to state capture.
The Gupta brothers are wanted on charges of fraud and corruption in relation to the Estina dairy project in Vrede‚ Free State. Ajay is also wanted for allegedly offering a bribe to former deputy finance minister Mcebisi Jonas in 2015.
Ajay and Rajesh Gupta applied to deputy chief justice Raymond Zondo for leave to cross-examine Jonas at the state capture inquiry.
They made a joint application for leave to cross-examine Jonas‚ former ANC MP Vytjie Mentor and former GCIS boss Themba Maseko‚ but the request was turned down by Zondo‚ who said they had no valid reason not to appear before the commission.
The brothers had stated that they would testify before the commission if it traveled to a neutral location outside South Africa or via a video conference.
“They [Ajay and Rajesh] say that they are presently in the United Arab Emirates‚ that they have no intention of ever returning to South Africa for any reason whatsoever‚ and that the reason why in effect is that they are afraid that the Hawks will arrest them as a result of what they call incompetence on the part of the Hawks‚ and that they may be charged by the National Prosecuting Authority‚ which they say is also incompetent‚” Zondo said‚ paraphrasing a supplementary affidavit the commission received from the brothers.
DA public enterprises spokesperson Natasha Mazzone believes the treaties mean the Guptas are “fast running out of places to hide as they can now face extradition to finally answer for state capture”.
“For far too long‚ the Guptas have shown contempt for the law and dodged accountability for bleeding the country’s state-owned enterprises dry. They should not be allowed to run and hide anymore.”
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