28 Sawubona March 2015

What’s happening at South African Airways this month

SAA’s 90-Day Action Plan, a road map designed to return SAA to full implementation of its Long-Term Turnaround Strategy (LTTS), is on target in terms of roll-out and active engagement across all levels of the company.

Tasks already completed include a review of the SAA long-haul international network, as well as a re-evaluation of fleet requirements. In December the airline announced its new route between Johannesburg and Abu Dhabi, along with a deeper commercial relationship with Etihad through code-share network extensions and upped frequencies to key African destinations. “Network optimisation is key and we expect to make more announcements regarding commercial efficiencies in the near future,” says Acting SAA CEO, Nico Bezuidenhout.

The SAA “War Cabinet” – a small group of key senior executives in the business – plays a critical role in the implementation process of the plan, with close monitoring by the newly constituted board. Its twice-weekly meeting cycle ensures implementation feedback from across the business, while a weekly feedback session reports to a National Treasury Technical Team. “The interventions managed by the ‘War Cabinet’ are directly linked to business deliverables to steer the company back onto a path of sustainability, as outlined in the LTTS. SAA is serious about rebuilding commercial sustainability and we’ll achieve our objectives. SAA means business,” says Bezuidenhout.

As a consequence of the on-cue implementation of the 90-Day Action Plan, the LTTS is re-energised and the business is receiving full support from its shareholder and close guidance from its board of directors. The plan comprises six main areas of focus:

1 Immediately addressing the airline’s liquidity position, ongoing solvency and medium-term funding requirements.

The interventions include:a) Addressing the solvency and liquidity of the business and

engaging with its shareholder and other stakeholders to ensure going-concern status is maintained.

b) Immediately reviewing the SAA network to stem losses.c) Focusing on working capital optimisation.d) Renewing cost compression efforts and expediting LTTS

implementation that will immediately impact the income and cash flow statements.

2 Immediate investigation of options to future-fund the business: The initiation of a process to investigate and determine options

for future-funding the business.

3 Substantial focus on governance defects and remedies: Immediate investigation and correction of any governance

failures within the business. This includes a wide-ranging review of processes and command and control structures within SAA, with particular reference to the implementation of the LTTS.

 

4 Legal and high-level governance: An immediate review of all contractual burdens and governance implications or defects

within the legal framework of the company. This includes the review of onerous agreements, correction thereof and other matters that impact the framing of remedial activity, as well as the re-establishment of foundation-laying for LTTS implementation within a tight governance environment.

 

5 Re-organisation and optimisation of assets: Examination of all assets in the business and re-organisation thereof in terms of the

requirements of the LTTS. Further optimisation will occur in line with the approved interventions.  

 

6 Improved communication: SAA will re-engineer its internal and external communication efforts to effectively communicate

with all direct and indirect stakeholders and South African citizens, particularly with reference to the implementation of the 90-Day Action Plan, as well as the LTTS.

SAA’s 90-DAY ACTION PLAN

• The innovative “tablet shelf” feature on the Business Class seats of the A320, which serves the Mauritius route, made the 2014 list of the top 10 airline innovations aimed at improving the travel experience. The back shell has a small shelf in which a passenger’s tablet can be slotted to create a removable IFE solution, with a USB power point that keeps the

device powered during the flight. • Seating in Economy Class offers a pitch

of 31”, with shared USB and PC power points and an adjustable headrest. Extra “living space” is offered by the slimline seats, which have been upholstered in leather. Colours used are dark beige and anthracite grey, with touches of red and blue from our corporate colours.

SAA INNOVATION