South African Airways CEO quits over lack of support from state

Vuyani Jarana, SAA Group Chief Executive Officer, poses for a photograph next to a South African Airways logo in Johannesburg, South Africa February 18, 2019 [ Image, Reuters]

South African Airways’ CEO Vuyani Jarana has resigned after less than two years in the job, saying his turnaround strategy for the loss-making airline was being undermined by a lack of state funding and too much bureaucracy.

Jarana’s departure, announced in a letter to the chairperson of the airline’s board dated May 29 and seen by Reuters, highlights the challenges facing South African President Cyril Ramaphosa as he seeks to speed up reforms at South African Airways (SAA) and other state-owned entities. They are dependent on government bailouts and are regularly cited by ratings agencies as one of the main threats to the country’s economic growth.

Jarana, a former executive at telecoms company Vodacom, was appointed in late 2017 to implement a strategy to return the airline to profit and wean it off government bailouts.

SAA, which has not made a profit since 2011, has drawn up a five-year turnaround plan that includes slashing costs and cancelling unprofitable routes as it grapples with cost increases that far outstrip revenue growth.

In a four-page resignation letter dated May 29, seen by Reuters, Jarana said he resigned due to uncertainty about funding and the current level of bureaucracy that his team has to go through to implement the group’s strategy, often resulting in slow decision making.

“The strategy is being systematically undermined, and as the Group Chief Executive Officer, I can no longer be able to assure the board and the public that the LTTS (long term turnaround strategy) is achievable,” he said.