South African Airways has appointed a new acting CEO. The new chief walks into his role with huge expectations on his shoulders. He is the third person to take charge of the unprofitable airline in four months.
Vuyisile Kona was appointed executive chairman in September by Public Enterprises Minister Malusi Gigaba. Just before Christmas the minister made him acting CEO. Less than 2 months later the board suspends him, just a day after the company starts testing the investment market with a R 1.5 bln bond, as a tide over until they get their bail-out package from the SA government. Chief strategist at Investment Solutions Chris Hart was diplomatic in his analysis.
Chris Hart, chief strategist of Investment Solutions, said, "An enormous amount of taxpayer money committed to SAA, and that was committed on the premise that SAA that there would be a turn around strategy. Now it looks like that this money is really going to be there just to keep the company afloat, and that more money will be required for the actual turnaround strategy that needs to still to be put in place. So when you’ve got managerial instability its unlikely that you’re going to see this turnaround strategy going to be put into place."
Airline analyst Linden Burns suggests that the board had no other choice, and despite, the fact that it was announced as a precautionary measure, we still don’t know what the reason for the suspension was.
Airline analyst Linden Burns said, "The move to suspend the acting CEO is probably a good move, the board obviously want to have a company or an organization that is beyond reproach and where they are not going to be questions asked about corporate governance. They’ve moved very swiftly to address that."
The new acting CEO is no stranger to the airline industry. In fact, he is no stranger to SAA, having worked in their corporate environment for several years.
Burns said, "Mango’s chief executive Nico Bezuidenhout is a well known entity in the low cost market and he’s been running a very tight ship, very efficient, he’s a very astute airline manager. That’s when we will start seeing more stability, I think Nico will be able to steady the ship."
It has been made clear, via the minister and the board that both acting CEOs are simply that. Their search continues for a permanent appointment. However Hart says that while Bezuidenhout might have the right experience and qualifications, there is another more pressing issue.
Hart said, "I think when it comes to appointments in parastatals and civil service, is that there’s a strong emphasis on redressing transformation imperatives, that seem to be more important than anything else."
So while the new acting CEO could be the right man for the job, he clearly doesn’t fit the profile of the person that the SAA board and the minister are looking for.
Reporter: “Minister Gigaba is known for taking action quickly. But he may want to reconsider his pace when appointing somebody to take over the ailing national carrier. Perhaps it’s time to look elsewhere.”