South African Airways set to implement revamp plan

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The Chief Executive Officer of South African Airways (SAA), Vuyani Jarana said the struggling state-owned airline will reorganise into three business units, as part of a revamp plan that could also involve the partial sale of its catering unit.

Jarana noted that South African Airways, which hasn’t made a profit since 2011, would organise itself into domestic, regional and international business units. In a bid to make the airline more agile and increase accountability, each unit will have its own management, rather than decisions being centralised.

SAA’s Chief Executive said “we are evolving into an operating model of three business units. We want to build a new SAA, fit for the future, place the right people in the right job”.

President Cyril Ramaphosa has been at pains to stabilise ailing firms like SAA, which survive on government handouts and weigh on confidence in Africa’s most industrialised economy, but the extent of their financial difficulties has meant slow progress.

Jarana also said SAA was exploring the partial sale of its catering unit, Air Chefs, as part of the restructuring.

South Africa’s state-owned airline, which expects to make another large financial loss this year, hopes to turn a profit by 2021 through restructuring and cutting jobs and routes. However, it’s finances were strained when it was ordered to 1.1 billion rand ($78 million) to rival Comair to settle an anti-competition case.

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