Aviation industry surprised, disappointed at SAA CEO's resignation


Aviation industry players were surprised to learn of South African Airways CEO Vuyani Jarana's resignation.

Jarana tendered his resignation to South African Airways (SAA) board chairperson JB Magwaza in a letter dated May 29, 2019. The CEO cited uncertainty about funding, and bureaucracy which delayed decision making necessary to turnaround the ailing airline, as reasons for his resignation, Fin24 reported.

A few industry players attending the International Air Transport Association's (Iata) annual general meeting (AGM) taking place in Seoul, South Korea on Sunday reacted to Jarana's resignation. Jarana was all set to attend the event, as he did last year, but less than a day before the start of this year’s AGM, it turned out he was not attending anymore.

"What, again? How many CEOs has SAA now had over the past few years," one aviation expert, who prefers to remain anonymous, reacted upon hearing the news.

Chris Zweigenthal, CEO of the Airlines Association of Southern Africa (AASA) was just as surprised to hear of Jarana’s resignation. "I worked with him as CEO of SAA and a member of the AASA executive committee and his vision has always been one of implementing a turnaround strategy which would ultimately turn SAA into a sustainable profitable airline," Zweigenthal told Fin24 on the sidelines of the AGM.

"The work he was doing was contributing to the overall wellbeing and sustainability of the airline industry in the region."

Zweigenthal emphasised the importance of having a healthy aviation industry. "It does not help if our airlines go through tough times. We are disappointed to hear of his (Jarana’s) resignation, but thank him for what he has done for the industry," he added.

Another industry expert, who wanted to remain anonymous, told Fin24 that one of the hurdles for Jarana at SAA was most likely "interference" by the stakeholder – in other words, government.

"When a CEO is put in charge of an airline, he or she must be allowed to be in charge. The 'owners' should exercise oversight, but not exercise control over management. They should have a hands-off approach," the expert told Fin24.

"You must give the person you appoint as CEO the opportunity to execute on a strategy. Jarana’s strategy would have led to a sustainable business case for SAA."

In the expert's view not only does SAA’s high debt situation need to be addressed, but there needs to be restructuring of the company to ensure that "people with the right skills are placed in the right positions" to fix the business model.

The expert said it is important for SAA to put resources where it would positively impact customers the most – something which Jarana was busy doing. Jarana was also busy looking at optimising SAA’s routes, which in the view of the expert was a good thing.

"SAA was in the middle of this process when the sudden announcement of Jarana’s resignation came. It takes time to see the success of these changes, but at least Jarana started to pave the road to success," said the expert.

"Continuity is really something SAA needed and now it has yet again been interrupted."

* Fin24 is a guest of Iata at its AGM. 

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