'Technical knockout' sees former SAA CEO lose R100k bet on airline's profitability

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During his time at SAA, Jarana had developed a turnaround plan which required R5 billion and which he believed could see the airline become sustainable after a few years.
During his time at SAA, Jarana had developed a turnaround plan which required R5 billion and which he believed could see the airline become sustainable after a few years.
  • Three years ago, former SAA CEO Vuyani Jarana accepted a bet about the airline's profitability by March this year.
  • The challenge was made at the time by Leon Louw, president of the Free Market Foundation.
  • The R100 000 Jarana has to cough up will be donated to charity.

Former SAA CEO Vuyani Jarana has made good on a bet about the airline's future profitability. 

Jarana accepted the R100 000 bet three years ago from Leon Louw, president of the Free Market Foundation (FMF).

At the time, Louw bet Jarana that SAA will not be able to be profitable by the end of March 2021.

"I'm delighted that our friendly wager has a happy ending. Leon wins what I deem to be on a technical knockout in boxing terms. Everyone close to SAA at the time could see that the initiatives were showing green shoots of progress towards turnaround of the company. I still believe there is space for an airline of SAA's profile in the African aviation market," Jarana said in a joint statement on Wednesday.

"Unfortunately, I could not see through my term, hence Leon becomes [the] lucky winner. The biggest motivation for me to honour the wager, notwithstanding the circumstances, has been the choice of the charity project that will benefit from the wager. Khaya Lam is a worthy cause that I encourage everyone to support - giving people title to property. We cannot say that we have truly ended apartheid land dispossession when the majority still do not have titles for their homes."

FMF's Khaya Lam Land Reform Project issues fully tradable freehold titles to previously disadvantaged persons. According to the FMF, the project has enabled the registration of over 10 000 title deeds directly; an estimated 40 000 indirectly; and 8 000 are in progress.  

Jarana emphasised that he is no longer involved with SAA and would not want to be drawn into the prevailing SAA challenges. On leaving SAA, he returned to the ICT sector as an investor and sits on various boards.

SAA's failure not attributed to Jarana

According to Louw, SAA's failure to turn a profit by the end of March 2021 cannot be attributed to Jarana, who left 21 months ago. 

"Having lost the wager technically, Mr Jarana has graciously agreed to honour it and support the FMF's Khaya Lam freehold titling programme," said Louw.

"We hold Mr Jarana in the highest esteem and said, at the time, that if anyone could save SAA, he could. We'd hoped the wager would induce the government to give him the freedom and support he needed."

In his resignation letter from May 2019, Jarana referred to, among other things, high levels of bureaucracy, increasingly "blurred" lines of accountability and having to constantly try to make SAA commercially sound, with no guarantee of funding. At the time he had been at the helm of SAA for less than two years. SAA went into business rescue in December 2019.

During his time at SAA, Jarana had developed a turnaround plan which he believed could see SAA become sustainable after a few years. His plan required R5 billion to be implemented. In the end, he was not provided the funding, and resigned.

Just a few months later, in December 2019, SAA had to go into business rescue. SAA's rescue plan requires R10.3 billion to be implemented, of which R7.8 billion has already been paid to the rescue practitioners. The remainder is going into a receivership to be paid over a period of three years. This money does not cover the restructuring of a "new SAA". The Department of Public Enterprises is currently looking for a strategic equity partner for a restructured SAA. 

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